FRC Bares Priority Next Year
The Financial Reporting Review Panel has announced that its review activity in 2012/13 will focus on the commercial property, retail, and support services sectors.
Reports and accounts will continue to be selected from across the full range of companies within the Panel’s remit, including large private companies, and may be selected for review on the basis of company specific factors.
The Panel will pay particular attention to the reports and accounts of companies whose shareholders have raised concerns about governance or where there have been specific complaints. It will continue to liaise with the FSA, particularly in relation to financial service companies including banks.
The Panel will focus on disclosures relating to the reporting of risks, including principal risks and uncertainties and risks arising from financial instruments.
In the current uncertain economic climate, the degree of estimation in accounts may increase. It will be important that the appropriate disclosures of judgements and key assumptions underpinning estimates and sensitivities around them are included and the Panel will be giving this area its attention. The Panel will continue to review the application of IFRS 3 (Revised) to business combinations.
The Panel will consider whether business reviews are fair, balanced and comprehensive which means that they cover both good and bad news during the period.
Bill Knight, Chairman of the Panel said: “Directors are facing significant challenges in managing risks and in arriving at estimates for their accounts. Transparency is vital. If risks and uncertainties can be clearly explained, much will have been achieved”.