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

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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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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.

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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.

Accounting Roundup - Closing Out 2019 Image

Accounting Roundup - Closing Out 2019

10 Dec, 2019

Closing Out 2019 discusses the significant corporate reporting issues relevant to 31 December 2019 annual reports, covering areas of regulatory focus identified in the FRC’s Annual Review of Corporate Reporting 2018/2019 and the ESMA’s common enforcement priorities for issuers in the European Union, together with other developments in reporting standards and areas of investor interest.

Governance in brief — FRC issues advice on annual reports for 2019/20 reporting season Image

Governance in brief — FRC issues advice on annual reports for 2019/20 reporting season

14 Nov, 2019

The FRC has issued its Annual Review of Corporate Reporting and annual open letter to finance directors and audit committee chairs covering its perspectives on key developments and areas of focus for 2019/20 annual reports. The report sets out the FRC’s “expectations for corporate reporting to improve trust in business”, emphasising the annual report is a vehicle of trust and stewardship.

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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.

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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

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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.

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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.

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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.

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Need to know — Accounting, auditing and corporate governance – legal and regulatory changes arising from a “No Deal” Brexit

06 Mar, 2019

This Need to know discusses the accounting, auditing and corporate governance – legal and regulatory changes arising from a “No Deal” Brexit.

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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.

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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.

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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.

Governance in brief — Brexit and viability disclosures - a timely reminder Image

Governance in brief — Brexit and viability disclosures - a timely reminder

05 Feb, 2019

This Governance in brief examines the responsibilities of directors regarding risk and viability reporting, the importance of directors understanding the potential impact of Brexit through internal scenario planning, and how the board can ensure that shareholders and other stakeholders receive unambiguous disclosure through the annual report.

Accounting Roundup - Closing Out 2018 Image

Accounting Roundup - Closing Out 2018

13 Dec, 2018

Closing out 2018 discusses the significant corporate reporting issues relevant to 31 December 2018 annual reports, covering areas of regulatory focus identified in the FRC’s Annual Review of Corporate Reporting 2017/2018, the ESMA’s common enforcement priorities for issuers in the European Union together with developments in reporting standards and areas of investor interest.

Governance in brief— FRC issues advice on annual reports for the 2018/19 reporting season Image

Governance in brief — FRC issues advice on annual reports for the 2018/19 reporting season

06 Dec, 2018

The Financial Reporting Council (FRC) has issued its Annual Review of Corporate Reporting and annual letter to finance directors and audit committee chairs covering its perspective on key developments for 2018/19 annual reports.

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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.

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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.

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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.

Correction list for hyphenation

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