The debate over the valuation and reporting of intangibles, and whether a compelling case exists for a change in the way they are reflected in corporate reporting, has grown within the global economy and an increasing focus has been placed on the intangible drivers of value within companies and how these act as indicators of the future prospects and underlying value of a business.

The research now made available used case-study based surveys and workshops to:

• Analyse the production processes and the disclosure approach for intangibles by a representative sample of European preparers;
• investigate and understand the “consumption” processes of information on intangibles by the main capital market participants in European countries; and
• understand the reasons behind those classes of professionals (preparers or users) not wanting intangibles recognised.

The press release on the ICAS website offers a summary of the finding and access to the full research report.

The 2023 Strategy re-emphasises the government’s commitment to the sustainability disclosure requirements (SDR) set out in its Greening Finance Roadmap, published in October 2021, including its support for UK adoption of the standards being finalised by the International Sustainability Standards Board (ISSB) and the development of an endorsement mechanism. The SDR aims to create a streamlined disclosure framework bringing together new and existing sustainability reporting disclosure requirements for UK businesses, the financial sector and investment products.

The UK has already taken a number of steps in developing the SDR, including the Financial Conduct Authority (FCA)’s Listing Rule for premium and standard listed companies to make disclosures consistent with the Task Force on Climate-related Financial Disclosure (TCFD) Recommendations, and government legislation to require certain AIM-listed and unlisted companies and LLPs to include climate-related financial disclosures in the annual report. TCFD reporting requirements have also been introduced for asset managers, life insurers, FCA-regulated pension providers and occupational pension schemes.

The government aims to introduce the SDR in a way that complements the UK’s wider non-financial reporting framework, minimises duplication with other forms of corporate reporting and gives businesses enough time to implement the new requirements. To this end, the 2023 Strategy confirms that the government will be carrying out a broader review of the UK’s non-financial reporting framework, beginning with a call for evidence requesting stakeholder views on how best to achieve these aims.

The 2023 Strategy sets out plans to implement four key components of the SDR:

• Disclosure of transition plans.
• IFRS Sustainability Disclosure Standards developed by the ISSB.
• Company reporting of GHG emissions, nature-related financial risks and impacts, and physical climate risks.
• Fund labels and the FCA’s approach to the SDR.

The 2023 Strategy also sets out plans to develop and consult on a UK Green Taxonomy to promote transparency and help to direct investment towards sustainable businesses.

The 2023 Strategy can be found on the government website here.  Our related Need to know publication is available here.

The purpose of the NSS Sustainability Forum is to develop an understanding of connectivity issues between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards, consider possible solutions that would address stakeholder needs for connectivity between information presented in companies’ sustainability reports and financial reports, and to share them with the International Sustainability Standards Board (ISSB) and International Accounting Standards Board (IASB) as they develop high quality international standards.

For more information, see the UKEB website.

The members have been drawn from across the rate-regulated community and bring a wealth of practical experience in analysing and using financial reporting information.

For more information, see the UKEB website.

The Sustainability Working Group (SWG) will advise the Secretariat on the connectivity between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards.

For more information, see the UKEB website.

We agree with the Government’s focus on the importance of responsible payment practices. Since they came into effect, the Regulations have had a recognisable impact in shaping how organisations have implemented prompt payment practices and the organisations that have approached us for advice in this area have taken their reporting obligations seriously. We agree that the Regulations should be extended beyond their current statutory expiration date.

Our response also raises the following observations:

• Reporting the value of payments that have not been paid within agreed terms: we do not think this additional disclosure will deter organisations from making late payment and highlight the risk that this will drive the wrong behaviours, encouraging organisations to prioritise payment of larger value invoices. 
• Disclosure in the directors’ report: we do not believe there should be a new requirement for organisations to disclose the information required by the Regulations in their directors’ report as well as in their online submission.

The full comment letter is available here.