The reviews will be undertaken in 2019/20 and are in addition to follow up thematic reviews on companies’ disclosures around IFRS 9 and IFRS 15 announced on 5 November.

Impairment of non-financial assets

The FRC will conduct a thematic review of companies’ disclosures relating to the impairment of non-financial assets to encourage more transparent reporting of:

• the events and circumstances that led to the recognition or reversal of an impairment loss, and
• the basis on which the directors concluded that the carrying amounts of non-financial assets are recoverable.

Disclosures relating to the implementation of IFRS 16 within 2019 interim accounts

The FRC will monitor companies’ disclosures of the impact of the new financial reporting standard IFRS 16 Leases in interim accounts issued in 2019. The FRC has already conducted a ‘light touch’ thematic review of the disclosures relating to IFRS 16. Findings indicated that whilst there were examples of good disclosure, most companies have work to do in order to provide meaningful information in the 2018 year end reports and accounts.

The FRC indicates that it expects companies to include detailed quantitative disclosure of the expected effect of transition to IFRS 16 in their December 2018 year-end accounts. Where quantitative information is not possible the FRC expects additional qualitative information to be provided to enable users to understand the magnitude of the expected impact.

Further details of the thematic reviews can be found on the FRC website:

• Thematic review – Impairment of non-financial assets (link to FRC website)
• Thematic review – IFRS 16 Leases (link to FRC website)