Companies are still grappling with significant uncertainty due to the ongoing uncertain macroeconomic and geopolitical environment, which includes the persistent effects of climate change, high interest rates and inflation, energy security concerns, cyberattacks, and international conflicts and tensions such as the Russia-Ukraine war.  Investors and regulators are expecting companies to be transparent in how they are dealing with this challenging reporting landscape. 

Companies therefore need to consider how to assess and address these sources of uncertainty when preparing their annual and interim reports. Whilst companies may by now be more familiar with the challenges of reporting in times of uncertainty, timely and high-quality reporting that reflects the ongoing uncertainties companies face and their response to those uncertainties remains as important to investors, creditors, and broader stakeholders as ever. 

The FRC’s Annual Review of Corporate Reporting 2022/23 and ESMA’s Common Enforcement Priorities provide guidance on appropriate reporting and meeting investor expectations and highlight areas of regulatory scrutiny that reporters of all sizes should focus on in their forthcoming reporting. Messages contained within recent FRC thematic reviews should also be considered when preparing annual and interim reports.

UK public interest entities, AIM companies, banking and traded LLPs, and other UK companies and LLPs with more than £500m turnover whose accounting period begins on or after 6 April 2022 will need to comply with new climate-related financial disclosure requirements with exemptions for companies and LLPs with 500 or fewer employees. And, for accounting periods beginning on or after 1 April 2022, premium and standard listed companies will need to provide enhanced disclosures on board and leadership diversity. 

Whilst the majority of amendments to both UK GAAP and IFRS Accounting Standards have been relatively minor, companies will need to reflect the impact of IFRS 17 Insurance Contracts, effective for accounting periods beginning on or after 1 January 2023, within their annual financial statements for the first time.  Additionally, amendments to IAS 12 Income taxes and Section 29 of FRS 102 will provide relief for affected companies from accounting for deferred taxes arising from the implementation of the Pillar Two model rules. 

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