Brexit resources

A number of changes resulting from the UK’s withdrawal from the EU take effect for the first time for UK companies for financial years beginning on or after 1 January 2021 and are therefore effective for the first time for 31 December 2021 year-ends onwards.  These changes, which are expanded upon in our comprehensive Closing Out 2021 publication, affect:

  • the exemption from audit (and, if a dormant company, from preparing and filing accounts) for subsidiaries whose liabilities are guaranteed by a parent.
  • the exemptions from preparation of group accounts on the grounds of consolidation into a larger group.
  • non-financial information statement requirements for large PIEs within their strategic report.
  • availability of some exemptions such as adoption of the small companies regime (s384 of the Companies Act 2006), the consolidation exemption for small groups (s399), and exemptions for medium-sized companies (s467).

Additionally for periods beginning on or after 1 January 2021, UK companies required or choosing to apply IFRS Standards must comply with UK-adopted IFRS Standards. UK-adopted IFRS Standards comprise IFRS Standards as endorsed by the EU as at 31 December 2020 and any standards or amendments that have been endorsed by the UK Endorsement Board after that date. 

As a result of the UK's exit from the EU, the FRC has issued updates to FRSs 100-105 for changes in legislation.  The Amendments were limited to those necessary to ensure consistency with UK company law and largely updated legal references and terminology used in the standards. Early application was permitted for UK entities in certain circumstances  

Investor and FRC expectations in annual reports

The significant uncertainties in relation to the UK’s future relationship with the EU and the terms of any future economic partnership agreement continue to persist. Investors look for transparent information on how the uncertainties arising from the ongoing UK-EU negotiation affect the company, including its ability to continue as a going concern and its longer-term viability and prospects.  Company reports should explain company-specific risks and uncertainties arising as a result of Brexit. This should include the impacts on different parts of the business and any effects on the financial statements including major sources of estimation uncertainty, amounts at risk and ranges of potential outcomes.

This page includes all of our resources on the financial reporting implications of Brexit.  It includes links to:

Related resources

Accounting roundup — Closing Out 2021

16 Dec 2021

Closing Out 2021 discusses the principal corporate reporting issues arising in respect of 31 December 2021 annual reports, covering areas of regulatory focus identified in the FRC’s Annual Review of Corporate Reporting 2020/2021, issues arising from climate change including new and forthcoming climate-related disclosures and developments in reporting standards.

Governance in focus — On the board agenda 2022

03 Dec 2021

As 2021 draws to a close, our annual review of board topics will stimulate your thinking and help prepare you for the year ahead. Across the board, expectations of business are rising and it is this demanding environment which shapes the articles in this year’s publication.

Governance in brief — FRC issues advice on annual reports for 2021/22 reporting season

11 Nov 2021

The FRC issues advice on annual reports for 2020/21 reporting season

FRC publishes findings on the quality of corporate reporting in 2020/2021

27 Oct 2021

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2020/2021. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and highlights the ten most frequently raised topics where improvements to reporting quality are needed.

FRC publishes its third Annual Enforcement Review

03 Aug 2021

The Financial Reporting Council (FRC) has published its third Annual Enforcement Review.

FRC publishes its Strategy, Plan and Budget for 2021/22

12 Apr 2021

The Financial Reporting Council (FRC) has published its Strategy, Plan and Budget for 2021/22.

FRC publishes its draft Strategy, Plan and Budget for 2021/22

23 Feb 2021

The Financial Reporting Council (FRC) has published its draft Strategy, Plan and Budget for 2021/22. Comments are requested by 12 March 2021.

Need to know — Accounting, auditing and corporate governance – legal and regulatory changes arising from Brexit

28 Jan 2021

This Need to know discusses the accounting, auditing and corporate governance – legal and regulatory changes arising from the UK's withdrawal from the EU ("Brexit").

FRC amends UK Standards to reflect changes in the law as a result of the UK’s withdrawal from the EU

22 Dec 2020

The Financial Reporting Council (FRC) has published amendments to UK accounting standards to reflect changes in UK company law following the UK’s exit from the European Union that come into effect at the end of the Transition Period.

ICAEW publishes guide highlighting key considerations for the 2020/21 reporting season

18 Dec 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) Financial Reporting Faculty has published a guide highlighting key areas that preparers should focus on in the forthcoming reporting season.

Governance in focus — On the board agenda 2021

10 Dec 2020

As 2020 draws to a close, our annual review of board topics will stimulate your thinking and help prepare you for the year ahead.

Accounting Roundup - Closing Out 2020

10 Dec 2020

Closing Out 2020 discusses the significant corporate reporting issues relevant to 31 December 2020 annual reports, covering areas of regulatory focus identified in the FRC's annual review of corporate reporting 2019/20, issues arising from the COVID-19 pandemic and the current economic environment and developments in reporting standards and areas of investor interest.

FRC and BEIS letters on accounting and reporting from 1 January 2021

27 Nov 2020

The Department for Business, Energy and Industrial Strategy (BEIS) and the Financial Reporting Council (FRC) have jointly published updated letters to audit firms and companies setting out changes to the UK’s corporate reporting framework after the end of the transition period on 31 December 2020. The changes are particularly relevant for UK incorporated companies, multinational groups with a UK and EEA presence and UK and EEA companies with cross-border listings.

Governance in brief - FRC issues advice on annual reports for 2020/21 reporting season

23 Nov 2020

FRC issues advice on annual reports for 2019/20 reporting season

FRC publishes year-end advice to Audit Committee Chairs and Finance Directors in advance of the 2020/21 reporting season

14 Nov 2020

The Financial Reporting Council (FRC) has published a letter to Audit Committee Chairs and Finance Directors, in advance of the 2020/21 reporting season, setting out its expectations for preparers of reports and accounts for the coming year.

Annual report insights 2020-Surveying FTSE reporting

29 Oct 2020

Our latest annual reporting survey, Annual report insights 2020, provides insights into practices in annual reporting, focusing on areas where requirements have changed, where regulators are focusing or where innovative practices are emerging.

FRC publishes findings on the quality of corporate reporting in 2019/2020

21 Oct 2020

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2019/2020, which provides the FRC's assessment of corporate reporting in the UK based on evidence from a variety of sources, including the work of the FRC's own Corporate Reporting Review (CRR) team. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and what it expects companies to focus on in the coming reporting season. The FRC expects companies to consider its findings during the financial reporting process.

Need to know — Accounting, auditing and corporate governance – legal and regulatory changes arising from Brexit

04 Sep 2020

This Need to know discusses the accounting, auditing and corporate governance – legal and regulatory changes arising from the UK's withdrawal from the EU ("Brexit").

FRC publishes its plan and budget for 2020/21

24 Mar 2020

The Financial Reporting Council (FRC) has published its plan and budget for 2020/21.

FRC and BEIS publish revised Brexit accounting and audit letters

14 Feb 2020

The Financial Reporting Council (FRC) and the Department for Business, Energy and Industrial Strategy (BEIS) have jointly published revised letters for auditors and accountants with information regarding auditing, accounting and corporate reporting standards during the transition period following the UK’s exit from the EU on 31 January 2020.

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