This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Brexit resources

Changes to the UK’s accounting, corporate reporting, auditing and corporate governance regimes 

Under the European Union (Withdrawal) Act 2018, the UK ceased to be a member of the EU on 31 January 2020. Under the withdrawal agreement, enacted in UK law by the European Union (Withdrawal Agreement) Act 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.

There are a number of changes to the UK’s accounting, corporate reporting, auditing and corporate governance regimes after the end of the transition period.  These changes are reflected in a number of statutory instruments which have been made by the government.  These instruments amend retained EU law and EU-derived domestic legislation to address deficiencies and ensure that the law continues to operate effectively after IP completion day. They take effect from IP completion day, although in many cases transitional provisions exist such that changes take effect only for financial years beginning on or after IP completion day.  The majority of changes made by these statutory instruments are to the Companies Act 2006 and affect a variety of provisions including eligibility for the small companies regime, exemptions from preparing consolidated accounts and the availability of audit exemption for subsidiaries. They also introduce a new legal term ‘UK-adopted international accounting standards’ for IFRS Standards as adopted by the UK and provide for a UK endorsement mechanism of IFRS Standards. 

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.

The FRC has issued updates to FRSs 100-105 to reflect changes in the law as a result of the UK’s withdrawal from the EU

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.

In its letter to Audit Committee Chairs and Finance Directors, the FRC's expectations are clear.  It expects company reports to 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

Governance in focus — The risks and opportunities of Brexit – Survey of FTSE 100

14 Jul 2017

Our latest publication examines how companies have disclosed the risks and opportunities of Brexit in their annual reports and includes examples of disclosure. These annual reports were written and published in advance of the triggering of Article 50 and the general election but they do represent the start of a journey to more comprehensive disclosure.

Governance in focus — On the board agenda — H2 2017

27 Jun 2017

The Deloitte Academy’s review of hot topics for boards and committees for the remainder of the year covers both emerging themes as well as areas of regulatory focus. We have pulled together in one place a series of articles across the board and board committee agenda – from responding to Brexit, demonstrating the board’s consideration of broader stakeholder interests and addressing complex and emerging technology matters. There is much more to consider than usual.

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”.

Need to know — UK exit from the European Union

29 Mar 2017

This newsletter discusses income tax reporting following triggering of Article 50 by the United Kingdom and which transactions might be affected.

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.

FRC publishes findings on the quality of corporate reporting in 2015/2016

21 Oct 2016

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2015/2016, 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.

2016 update on half-yearly financial reporting

15 Jul 2016

This publication provides an illustrative half-yearly financial report (also referred to as 'interim accounts') and disclosure checklist, suitable for use for June 2016 half-years. The regulatory requirements for UK listed companies’ half-yearly financial reports are also explained, highlighting the changes for preparers to contend with in 2016.

ICAS: UK unlikely to depart from IFRSs if it intends to remain a global player

01 Jul 2016

After the EU referendum in the UK, the Institute of Chartered Accountants of Scotland (ICAS) published a list with with 20 questions on the 'Brexit' ranging from business and trade to accounting and audit. In three separate batches, the ICAS staff have now published some answers to those questions and provide additional context and background to the key issues.

EU referendum in the UK

24 Jun 2016

In the EU referendum in the UK yesterday, which saw a turnout of 71.8%, 51.9% of the voters made clear that they see the UK’s interests best-served by leaving the European Union.

FRC letter to investors ahead of the 2016 shareholder meeting season

18 Mar 2016

The Financial Reporting Council (FRC) has issued a letter to investors ahead of the 2016 shareholder reporting season highlighting recent changes 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 these expectations”.

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.