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Deloitte comment letter on FRED 70 'FRS 101 Reduced Disclosure Framework - 2018/19 cycle'

Published on: 10 May 2019

We have published our comment letter on the Financial Reporting Council’s (FRC’s) Financial Reporting Exposure Draft (FRED) 70 ‘'FRS 101 Reduced Disclosure Framework - 2018/19 cycle'

Overall, we agree with the assessment of the conflict between IFRS 17 presentation and measurement requirements and the format headings required by Schedule 3 to the Regulations (or similar). We welcome the proposed amendment to the definition of the qualifying entity to exclude entities that are required to apply Schedule 3 to the Regulations (or similar) as a timely and pragmatic solution to the problem.

Other potential solutions, such as changing the requirements of Schedule 3 to the Regulations to permit compatibility with IFRS 17, are options to consider in the future. This would require working with the European Commission and other bodies to amend the Insurance Accounts Directive. Alternatively, in the event of the UK leaving the European Union, changes to the UK law could be considered to allow entities that are currently required to apply Schedule 3 format the flexibility of being able to apply FRS 101 and to follow the presentation aligning with IFRS 17

In relation to the definition of requirements 'similar' to Schedule 3 to the Regulations for entities that are bot companies, we recommend that the FRC provide guidance on the relevant requirements to avoid diversity of interpretation.

Further comments and a full response to all questions raised in the invitation to comment are contained within the full comment letter below.

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