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Brexit news

Under the European Union (Withdrawal) Act 2018, the UK ceased to be a member of the EU on 31 January 2020 ('exit day'). Under the withdrawal agreement, enacted in UK law by the European Union (Withdrawal Agreement) Act 2020 (WAA 2020), there is an implementation period (IP), which ends on 'IP completion day', defined as 31 December 2020 at 11.00 p.m. UK time.

UK reporting continues to be subject to the EU legislative framework until IP completion day. This means that:

  • existing company law relating to accounts and audit continues to apply;
  • companies that are required or choose to adopt IFRS Standards must use IFRS Standards 'as endorsed for use in the European Union', meaning that new or revised Standards cannot be adopted before EU-endorsement; and
  • the FRC remains a competent authority of an EU Member State, tasked with monitoring and supervising compliance with ESMA’s common enforcement priorities, which therefore remain relevant for UK company reporting.

For financial years commencing on or after IP completion day, a new UK adoption mechanism for IFRS Standards will be established. IFRS Standards as adopted by the UK will start from the extant IFRS Standards as adopted by the EU, but there may be later changes and/or differences in the timing of endorsement. UK incorporated entities with securities admitted to trading elsewhere in the EEA may need to confirm they have followed both frameworks.

For financial years commencing on or after IP completion day, changes to Companies Act requirements to reflect the fact that the UK is no longer subject to EU law will take effect. The general principle is that these changes will maintain existing requirements and exemptions in most cases. However, there will be some changes of substance.  For example, exemptions which rely on being part of a group headed by an EEA parent will be available only to entities with a UK parent.  Although the various regulations making these changes still refer to 'exit day' (as they were enacted in contemplation of an exit without a transitional agreement), Schedule 5 to WAA 2020 states that this should be read as IP completion day.

Whilst most of the necessary amendments to legislation have been made, there may be some further changes during the implementation period and it is possible that further changes may result from any agreements reached between the UK and the EU, either as part of a future trade agreement or as a result of equivalence decisions taken under UK and EU law.

This page includes all of our news on the financial reporting implications of Brexit.

Related news

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.

FRC publishes its draft plan and budget for 2020/21

12 Feb 2020

The Financial Reporting Council (FRC) has published its draft plan and budget for 2020/21. Comments are requested by 28 February 2020.

FRC announces thematic reviews for 2020/2021

16 Dec 2019

The Financial Reporting Council (FRC) has announced the corporate reporting and audit quality thematic reviews that it will undertake in 2020/21.

FRC publishes findings on the quality of corporate reporting in 2018/2019

30 Oct 2019

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2018/2019, 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.

FRAB minutes for April and June 2019 meetings released

28 Oct 2019

The minutes of the Financial Reporting Advisory Board’s (FRAB’s) meeting of 4 April 2019 and 13 June 2019 have been made available on the HM Treasury website

FRC publishes letter to Audit Committee Chairs and Finance Directors on the UK's exit from the EU

27 Sep 2019

The Financial Reporting Council (FRC) has published a letter to Audit Committee Chairs and Finance Directors setting out some of the actions companies should consider in advance of the UK’s exit.

FRC plan and budget highlights key areas of focus for 2019/20

23 May 2019

The Financial Reporting Council (FRC) has published its Plan and Budget for 2019/20, which sets out its priorities for 2019/20.

Government approves the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019

28 Mar 2019

The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 (SI 2019/685) have been approved by the government.

Government approves the Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019

28 Feb 2019

The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (SI 2019/177) have been approved by the government.

FRC and BEIS publish ‘no deal’ Brexit accounting and audit letters

22 Feb 2019

The Financial Reporting Council (FRC) and the Department for Business, Energy and Industrial Strategy (BEIS) have published letters for auditors and accountants to share information in case there is no deal for leaving the EU by 29 March 2019.

Government approves the Accounts and Reports (Amendment) (EU Exit) Regulations 2019

15 Feb 2019

The Accounts and Reports (Amendment) (EU Exit) Regulations 2019 (SI 2019/145) have been approved by the government.

FRC publishes year-end advice to preparers in advance of the 2018/19 reporting season

25 Oct 2018

The Financial Reporting Council (FRC) has published a letter to Audit Committee Chairs and Finance Directors, in advance of the 2018/19 reporting season, highlighting changes to reporting requirements and key matters which should be considered in the preparation of forthcoming annual reports and accounts.

FRC publishes findings on the quality of corporate reporting in 2017/2018

24 Oct 2018

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Governance and Reporting 2017/2018, 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 also includes information on the level of compliance with the provisions of the UK Corporate Governance Code (“the Code”) as well as the quality of explanations and reporting provided by companies in their governance statements and committee reports.

UK government publishes a "no deal technical notice" on accounting and audit

17 Oct 2018

The government has published a “no deal technical notice” on accounting and audit, setting out changes to the UK’s corporate reporting and audit frameworks if there is no deal between the UK and the EU over the terms of the UK’s exit from the European Union on 29 March 2019. It does not provide details of the frameworks if a deal is reached, which would apply after the end of an implementation period on 31 December 2020 – during that period existing laws and regulations would apply.

IASB chair provides update on current activities

28 Jun 2018

At the IFRS conference in Frankfurt, IASB Chair Hans Hoogervorst provided an update on the use of IFRS Standards around the world and the current thinking of the IASB.

FRC announces thematic reviews for 2018/2019

20 Nov 2017

The Financial Reporting Council (FRC) has announced the thematic reviews that it will undertake in 2018/19.

ICAEW publication on the financial reporting implications of Brexit

29 Sep 2017

The Institute of Chartered Accountants in England and Wales (ICAEW) has published 'Brexit: implications for financial reporting' as the ICAEW believes that the impact that Brexit will have on the UK’s financial reporting infrastructure and the related international ramifications have not yet been given sufficient attention.

FRC letter to investors ahead of the 2017 shareholder meeting season

12 Apr 2017

The Financial Reporting Council (FRC) has issued a letter to investors ahead of the 2017 shareholder reporting season highlighting recent changes and developments in reporting and encouraging investors to “engage with companies to provide a steer on what information they believe is relevant and to challenge where reporting falls short of expectations”.

ESMA announces enforcement priorities for 2016 financial statements

28 Oct 2016

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2016 financial statements will focus on.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.