In an uncertain world, the reporting of risk is high on the agenda of investors and regulators. Whether it be risks arising from the ‘Brexit’ process, cyber-security or environmental issues, the FRC is expecting to see a clear description of the risks facing each company and the measures they are taking to address them. This focus extends into the financial statements themselves, where the FRC’s programme of thematic reviews includes an analysis of disclosures on the significant judgements made in applying a company’s accounting policies and the sources of estimation uncertainty that could result in a material adjustment within the next financial year.

The changes to IFRSs that must be applied for a December 2017 year-end are limited; most notably amendments to IAS 7 Statement of Cash Flows on the disclosure of changes in financing liabilities. This requirement can be met via a traditional ‘net debt reconciliation’ provided it is formatted correctly. Cash flow statements more generally remain an area of consistent regulatory scrutiny.

Perhaps more significantly, the EU Non-Financial Reporting (NFR) Directive has been enacted into UK law and is effective for December 2017 year-ends. The effects of these new requirements will be most pronounced for large, unlisted companies but listed companies will also need to provide more information on their policies in areas such as diversity and human rights and, for the first time, companies will need to provide information on bribery and corruption measures.

Looking ahead, December 2017 annual reports will be published after the date of initial application of both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments. Given that, both the FRC and the European Securities and Markets Authority (ESMA) expect implementation analyses to be well advanced to see a ‘step change’ in the level of detail on the effects of those new standards compared to disclosures provided a year ago.

Our Closing Out 2017 publication covers all these topics and more, providing an invaluable guide to the issues affecting today’s corporate reporting.

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