UK FRC reiterates need for reliable information in corporate reports
The regulator says that in times of economic uncertainty, companies should continually assess evolving risks and ensure those risks are clearly explained.The UK Financial Reporting Council (FRC) reiterated the need for high-quality disclosures from companies during periods of economic uncertainty and published a review of its annual findings.
To support more informed decision-making, companies must ensure that investors and other stakeholders receive reliable information about a company's financial performance and prospects, the FRC said in a news release.
An FRC webinar on 19 October discussed the findings from the Discount Rates, Judgements and Estimates, Earnings per Share, Deferred Tax Assets, and Business Combinations thematic reviews.
The main topics discussed on the webinar included problems surrounding lack of company-specific disclosures resulting in boilerplate narratives, the need for more disclosures in areas of estimation uncertainty and sensitivities, more consistency needed across disclosures, and more precision required in definitions and terminology used in disclosures.
"While these are challenging economic times, companies need to be agile, continually assess evolving risks, and ensure these are clearly explained in their annual reports," FRC Executive Director of Supervision Sarah Rapson said in the news release.
For further guidance, the regulator urges the companies to look at the thematic reviews it has published.
The FRC expects to announce next year's thematic review topics at the end of the year.
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