Conduct Committee findings in relation to accounting under IAS 18

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30 Sep, 2015

The Financial Reporting Council (FRC) has issued a press release of the findings of its Conduct Committee stemming from the review of the annual reports and accounts of blur Group plc ("the company").

The principal issues included:

  • whether the company was principal or agent in relation to the outsourcing services it provided;
  • whether revenue was recognised only when there was sufficient evidence to conclude that the stage of completion could be assessed reliably and when it was probable that economic benefits would be received in accordance with IAS 18 Revenue; and
  • whether the strategic report gave a fair and balanced analysis of the company’s performance.

The Conduct Committee press release serves as a reminder that revenue recognition is a continued area of focus for the Conduct Committee and it can present a number of challenges for companies to consider.  It also highlights that entities should review arrangements carefully to determine whether they are principal or agent as this can significantly affect both the amount of revenue to be recognised and, potentially, when that revenue should be recognised. 

Please click here for the full press release on the FRC’s website.

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