Narrative reporting areas of focus

Regulatory messages continue to emphasise the need for authentic, balanced and comprehensive disclosures in annual reports to satisfy the needs of investors. To achieve this, information in the annual report should be integrated and connected between the strategic report and the rest of the annual report.

In its Annual Review of Corporate Reporting 2022/23, the Financial Reporting Council (FRC) indicates that aside from climate-related reporting requirements, no substantive challenges were raised in relation to non-financial reporting disclosures such as Streamlined Energy and Carbon Reporting (SECR) and it observed that entities may be becoming more familiar with these newer requirements.

However the FRC continues to raise challenges as to whether the strategic report is fair, balanced and comprehensive, noting that the financial review should address not only financial performance but also significant changes to the financial position of the company (i.e. the balance sheet) and significant movements in the cash flow statement.  In the current uncertain economic environment, the FRC particularly expects companies to use the strategic report to articulate clearly the risks and uncertainties the business faces covering economic and other risks such as inflation, together with mitigation strategies and any effects on the strategy and business model. These discussions should be consistent with disclosures made in the financial statements, particularly regarding sensitivities, assumptions and sources of uncertainty.  The FRC encourages companies to refer to its Guidance on the Strategic Report and What Makes a Good Annual Report and Accounts publication, which provides principle-based guidance when preparing a strategic report.

The FRC also noted that several companies, including large private companies, did not produce a section 172 statement which is a requirement for all companies except those that qualify as small or medium-sized.  Financial Reporting Lab report sets out what investors are looking for in this area and how companies can improve their reporting to better meet investor needs.  

Below is a collection of resources on narrative reporting areas of focus.  Click for direct access to specific narrative reporting resources:

Related Resources

FRC publishes practical tools to help companies achieve Clear & Concise reporting

17 Dec, 2015

The Financial Reporting Council (FRC) has today issued 'Clear & Concise: Developments in Narrative Reporting. This report includes practical tools to help companies achieve Clear & Concise reporting, as well as a study reviewing the influence of the FRC's Guidance on the Strategic Report on the quality of narrative reporting.

Accounting Roundup - Closing Out 2015

16 Dec, 2015

In this special edition of our Accounting Roundup series we set out the issues that should be front of mind for those preparing annual reports for years ending on or after 31 December 2015, be they listed company consolidated reports, private company or subsidiaries. Primarily, we address areas of regulatory focus, including those identified in the FRC’s Corporate Reporting Review Annual Report 2015 and as enforcement priorities by ESMA and those arising from the current economic environment or changes in accounting standards.

FRC publishes year-end considerations for larger listed companies

15 Dec, 2015

The Financial Reporting Council (FRC) has today published a letter containing year-end considerations for preparers of larger listed annual reports.

FRC publishes year-end advice to preparers of smaller listed and AIM quoted company annual reports

11 Nov, 2015

The Financial Reporting Council (FRC) has today published a letter containing year-end advice to preparers of smaller listed and AIM quoted company annual reports.

FRC publishes Strategy for 2016/19

28 Oct, 2015

The Financial Reporting Council (FRC) has published its Strategy for 2016/19. It intends to shift the emphasis of its activities away from the introduction of new requirements and, instead, to focus on embedding the requirements that have been introduced over the past three years to ensure that the intended benefits are secured.

November 2015 meeting of the ICAEW FRDG

27 Oct, 2015

The next meeting of the Institute of Chartered Accountants in England and Wales (ICAEW) Financial Reporting Discussion Group (FRDG) will be held on 2 November 2015 in London.

FRC publishes Corporate Reporting Review Annual Report 2015

22 Oct, 2015

The Financial Reporting Council (FRC) has today published the Corporate Reporting Review Annual Report 2015 (“the report”) covering reviews conducted by the Conduct Committee into the current state of corporate reporting in the UK. The report covers reviews carried out in the year to 31 March 2015. It highlights that “overall the quality of corporate reporting remains generally good, particularly by large public companies”. The report also indicates that there has been a “good response” to the FRC’s call for enhanced disclosures about complex supplier arrangements.

The Bruce Column — The gradual change that is transforming corporate reporting

20 Oct, 2015

Our regular, resident, columnist, Robert Bruce reports on the expert views discussed at a seminar on the latest Deloitte annual survey of the state of UK annual reports.

Annual report insights 2015 — The reporting landscape

07 Oct, 2015

The publication examines how companies have dealt with the latest corporate reporting challenges, including the narrative, corporate governance and financial elements, identifying new innovations and highlighting industry better practice as a take away for preparers of annual reports to consider.

The Bruce Column — From reporting to thinking: what the annual survey shows

07 Oct, 2015

The evidence is in from the latest Deloitte survey of annual reports. The cultural change which stems from strategic reports, more incisive narrative reporting, and the integrated thinking brought about through integrated reporting, is accelerating. Our regular, resident columnist, Robert Bruce, reports.

FRC publishes annual report 2014/15

28 Jul, 2015

The Financial Reporting Council (FRC) has today published its 2014/15 annual report (“the annual report”). The annual report reviews the activity of the FRC over the last year, highlights the achievements of the FRC in 2014/15 and also identifies areas that it will focus on in 2015/16.

HMRC publishes consultation on Improving Large Business Tax Compliance

27 Jul, 2015

HM Revenue & Customs (HMRC) has published a consultation entitled 'Improving Large Business Tax Compliance'. Amongst other measures, the consultation proposes that large businesses should publish their tax strategy annually. It seeks views on the right medium for publication of this information, in particular whether it should be included in the annual report and accounts.

Government Equalities Office issues consultation on Closing the Gender Pay Gap

16 Jul, 2015

The UK Government has this week launched a consultation on how to address the discrepancy between the average earnings of men and women employed by the largest UK employers (referred to as the 'Gender Pay Gap').

NAPF publishes discussion paper on workforce reporting

26 Jun, 2015

The National Association of Pension Funds (NAPF) has published a discussion paper highlighting its view that there is limited reporting by companies on their approach to managing the workforce even though the workforce is considered core to the financial performance of a company and in many ways are “a firm’s most valuable asset”.

ICAS publishes guidance on assurance over KPI reporting

19 Jun, 2015

The Institute of Chartered Accountants in Scotland (ICAS) has published guidance on the provision of greater assurance and transparency in KPI reporting. The guidance has been published against the backdrop of increased scrutiny of non-financial reporting in a company’s annual report of which KPIs are one element. The objective of the guidance is to enable audit committees and boards to provide users of financial statements with greater insight and understanding into the reliability, relevance and credibility of KPIs included within a company’s annual report.

ICSA publishes guidance note on good practice for annual reports

17 Apr, 2015

The Institute of Chartered Secretaries and Administrators (ICSA) has published a guidance note on good practice for annual reports.

The Bruce Column — Insights from the Financial Reporting Council

09 Apr, 2015

The Financial Reporting Council is encouraging far-reaching change and innovation in the fields of corporate governance and financial reporting. Robert Bruce, our resident, regular columnist, reports on an interview with the two executive directors involved in bringing about the changes.

Robert Bruce interviews — Insights from the Financial Reporting Council

09 Apr, 2015

In this interview Robert Bruce catches up with Melanie McLaren, Executive Director, Codes and Standards, and Paul George, Executive Director, Conduct, on the latest news from the Financial Reporting Council. They provide an overview of the FRC’s current agenda and future work and discuss which areas of financial reporting the Conduct Committee will be concentrating on in the year ahead. They discuss how they will be looking into financial reporting in companies which have had a change of auditor, how the new viability statements will work, how the wider responsibilities of audit committees should work, the rising importance of narrative reporting and integrated reporting and the auditor’s role, the new focus on succession planning for boards, and how corporate culture can be changed.

UN Guiding Principles Reporting Framework

04 Mar, 2015

Supported by the United Nations Working Group on Business and Human Rights, the first comprehensive guidance for companies to report on human rights issues in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs) has been launched. The framework will help companies wanting to improve their reporting on human rights and provides guidance on identifying human rights content for inclusion in an integrated report.

Stay Tuned Online - IFRS and UK GAAP update December 2014

19 Dec, 2014

The following topics are covered in the December 2014 webcast: 1 - Annual report insights, 2 - Financial Reporting Council's areas of focus, 3 - UK corporate reporting developments, 4 - New UK GAAP developments and reminders, 5 - New UK GAAP financial instruments and 6 - IFRS developments and reminders.

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