FRC reports on IFRS after first year of implementation

The Financial Reporting Council has
released its preliminary findings on the first implementation of
IFRS by UK listed companies.

The report, of accounts selected for review from FTSE 350 companies and
smaller listed companies, described compliance levels as ‘good’ but that there
were areas that needed improvement.

Financial reports did, however, tend to use
‘boiler-plate’ descriptions for disclosure of accounting
policies, so that in some cases it appeared that the wording of accounting
policies had been copied from the relevant standards with no indication of
company specific application.

Accounts were also noted for being too long and complicated.

‘More focused and thoughtful approaches to these areas might reduce their
length and increase understanding of the complexities which are inevitable in
sophisticated commercial operations,’ the report said.

Some disclosures made were also judged as ‘bland and uninformative’.

The FRC also highlighted cases that related to the presentation of accounts,
particularly the Income Statement, and reminded the preparers of accounts to
explain aspects of accounts. An example of this is factors which give rise to
goodwill and the potential requirement for additional information to be
disclosed under IFRS in respect of key managers.

Further reading:

Reporting Review Panel Publishes Preliminary Report on Implementation of

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