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2021/22 reporting: new guidance for preparers

Author: ICAEW Insights

Published: 26 Jan 2022

Several factors will be a focus for investors and regulators this 2021/22 reporting season. Preparers will need to keep them in mind.

During this reporting season, preparers are readying financial statements following another uncertain year. The effects of the pandemic are ongoing, and businesses need to explain material uncertainties that cast doubt on its ability to continue as a going concern.

It was also the first year fully in the post-Brexit era for Britain, with the transition period ending on 31 December 2020. The impacts of this became fully apparent in 2021, including changes to financial reporting standards and company law. It’s critical that preparers do not underestimate the impacts of these factors while putting together the company accounts.

Here are some of the key considerations that preparers should keep in mind.


As the transition period ended, it brought into effect changes in company law from 1 January 2021. UK IFRS reporters are required to switch from applying IFRS as adopted by the EU to IFRS as adopted by the UK. Where company law referred to the EEA or EU, it now refers to the UK. This potentially impacts consolidation exemptions, ineligible group status (more companies may qualify as small), dormant company status and availability of audit exemptions. Read more here.

Going concern and viability statements

Going concern and viability continue to be a major focus two years into the pandemic. Businesses must continue to explain any material uncertainties that cast doubt on an entity’s ability to operate as a going concern. The FRC published a thematic report on viability and going concern in 2021. It found that disclosures of inputs and assumptions used to support viability and going concern often lacked the qualitative and quantitative detail required. View resources on going concern here.

Impairment testing

There is also greater focus on impairment testing, including indicators of impairment and reversals of impairment other than goodwill. Many organisations are starting to show signs of growth and recovery after the tough conditions of the pandemic. It’s critical to review the validity of the assumptions being used when preparing forecasts to ensure they reflect future expectations appropriately. Preparers should factor in COVID-19, Brexit and the effects of climate change. Further guidance is available in ICAEW factsheets Applying IAS 36 Impairment of Assets and FRS 102: Impairment of Assets.

Adjustments after the recording period

With continuing economic complexities as a result of the COVID-19 pandemic among other things, some information may come to light after the reporting date that sheds light on conditions prior to that date. In some cases, an adjustment or disclosure may be required. For example, a new government intervention may be brought in to mitigate any economic impacts of COVID-19. Visit icaew.com/coronavirus for more information.

Climate-related matters

ESG has become a hot button topic when it comes to narrative reporting. Investors and regulators are putting an emphasis on the accurate reporting of the financial impact of climate-related risks and opportunities.

Where company directors consider climate change to be a principal risk or uncertainty, they should be disclosed in the strategic report.

Requirements for mandatory climate-related financial disclosures for certain publicly quoted companies, large private companies and LLPs will come in from April 2022. These will be based on TCFD recommendations. These are already in place for premium listed companies for accounting periods beginning on or after 1 January 2021. ICAEW has produced an overview of climate-related reporting requirements.

The major risks in 2021/22

Investors are also interested in risk disclosures. Three particular types of risk might warrant enhanced disclosure in this reporting season:

  • cyber risks: IT risks to businesses have been heightened by virtue of the shift to remote working;
  • supply-chain risks: both Brexit and COVID-19 have contributed to increased risks in this area; and
  • climate risks: investors continue to demand better disclosure on climate risk to businesses.

For a full summary of 2021/2022 reporting season considerations and practical help for preparers, take a look at ICAEW’s Financial Reporting Faculty guide here.

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