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FRC publishes thematic review findings on IFRS 15 and IFRS 16

  • FRC (United Kingdom Financial Reporting Council) Image

24 Sep 2020

The UK Financial Reporting Council (FRC) has published two thematic reviews to help companies improve the quality of their corporate reporting in relation to IFRS 15 'Revenue from Contracts with Customers' and IFRS 16 'Leases'.

The thematic review of IFRS 15 focused on those areas which gave the FRC greatest cause for concern in its thematic review of October 2019. The bulk of the review was focused on certain aspects of revenue reporting by a sample of 22 companies but also covered ‘quick reviews’ of 50 companies to substantiate and further inform the findings. Although the FRC notes some progress, it continues to identify disclosures by many companies that do not meet the FRC’s quality threshold. Companies should critically review their revenue-related disclosures to ensure they provide a clear understanding of how they have applied the requirements of the standard to their own particular circumstances. 

The thematic review of IFRS 16 focused on the disclosures made by a sample of twenty companies following the first year of adoption of IFRS 16 and is a follow up to the FRC’s report published in November 2019 that focused on disclosures made by interim reporters. The FRC found that most companies provided a good explanation of the impact of adopting IFRS 16. However, the quality of their disclosures should improve in future reporting.

For additional information and links to the reports, please see the press release on the FRC website.

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