With new types of transactions and ways of thinking emerging all the time, financial reporting never stands still. That was the message of Financial Reporting Council (FRC) Director, Accounting and Reporting Policy, Jenny Carter to this year’s ICAEW Corporate Reporting Conference.

Held on 9 June at Chartered Accountants’ Hall, the event gathered experts from practice, standard-setting and policymaking to provide delegates with a thorough grounding in upcoming and potential future changes to UK GAAP reporting rules and their likely impacts. Indeed, change and how professionals can both influence and respond to it were major themes of the event, as well as how stakeholders are seeking greater simplicity and efficiency.

Setting the tone in her opening keynote, Carter laid out the rationale behind the FRC’s Periodic Review process – a reappraisal of UK and Ireland accounting standards that the standard-setter carries out approximately every five years. She stressed that to keep up with new transaction types and other developments, it is essential for standards to evolve. However, the FRC accepts that companies and report users value stability, so prefer not to introduce new requirements or change existing ones too often.

When undertaking a review, Carter explained: “We do look for an international, IFRS-based solution, unless there’s a better alternative.” At the same time, she said, the FRC works to ensure proportionate alignment, reflecting the relative size, nature and complexity of UK GAAP preparers and the information needs of users of their accounts.

The Periodic Review 2024 amendments explored international alignment and proportionality in key areas such as revenue and leasing, introducing significant changes on both areas in FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland, but only to revenue in FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime. Ahead of the resulting amendments taking effect from 1 January 2026, the FRC is working with ICAEW and other professional bodies to communicate what the changes mean for practitioners.

Any Periodic Review involves significant stakeholder outreach through requests for views, round tables and exposure drafts.

In response to a question from ICAEW’s Head of Corporate Reporting Strategy, Sally Baker, Carter said that the FRC would always value even relatively brief responses to specific points in any reporting-themed consultation. “If you want to answer only one or two questions at a fairly high level, that’s still useful information,” Carter said. “We read and consider everything.”

Unique approach

Another organisation with change on its mind is the Department for Business and Trade (DBT). In a breakout session, DBT representatives tested some current thinking that might be proposed in its Non-financial Reporting Review, due later this year, and sought members’ views.

Clamping down on duplicative content, the aim is for each company to tell its story in a way that suits its individual needs in the pages of a simplified strategic report and, alongside it, to produce a sustainability report. The latter would contain all current reporting under the Climate-related Financial Disclosure Regulations and, in the future, UK Sustainability Reporting Standards. Meanwhile, economically significant companies may also publish a governance report.

One individual who works with small companies said that, in their current strategic reports, many clients tend to write very similar things, particularly on topics such as risk. DBT Assistant Director, Non-financial Reporting Review, Gemma Johnson said that the reforms aim to discourage boilerplate language and promote a more unique approach to reporting.

Another wondered whether DBT could issue ‘anti-guidance’, in the form of counter-examples that accountants could show their clients and say: “You’re essentially doing the same as this, but it no longer meets the bar for the new procedure.”

A third person queried the suggestion to define single thresholds for the strategic and sustainability reports to replace roughly 10 current thresholds that exist in the non-financial reporting landscape. “There’s a big difference between a company that’s only just large and one that’s on the verge of public interest,” he said. “While there shouldn’t be lots and lots of thresholds, one set does feel quite ambitious.”

Plea for consistency

As a finale, Baker introduced a panel discussion between experts from practice, the standards-setting arena and government to ponder the question: What’s next for corporate reporting? Panelists were encouraged to compile a wish list of future improvements in reporting and their ideas continued themes of simplification and efficiency that had surfaced in earlier sessions.

FRC Senior Project Director Stephen Maloney noted that the standard-setter expects its next Periodic Review to follow approximately five years after the last. While no firm plans have yet been made, this could mean that the project would commence in 2028, with an effective date in 2031. Among the areas he cited for potential consideration was the expected credit loss model of financial asset impairment from IFRS 9 Financial Instruments. “We’ve deferred looking at that a couple of times,” he said. “In the next review cycle, I’d like us to decide what to do.”

RSM UK Partner Danielle Stewart OBE said: “I’m a big fan of IFRS 18 – the new international performance standard that’s taking over from IAS 1, which changes the way we present the income statement. We should bring that into FRS 102, because I’d like to see consistent reporting between FRS 102 and IFRS.” 

On a related note, referencing the ability to adapt accounts format requirements and addressing fellow panelist, DBT Deputy Director Andrew Death, she made a plea: “At the moment, we’ve got these awful 1972 Companies Act reporting formats in law, but we don’t have to as we’re no longer in the EU. So when can we get rid, please?”

Anthony Appleton, Partner in the Technical Standards Group at BDO and incoming Chair of ICAEW’s Corporate Reporting Faculty Board, agreed. “It’s really annoying to have some formats in the accounting standards and others in the Companies Act, and have to flip between the two. As Danielle says, I’d like to see us move towards not needing to format in line with the Companies Act and allow the FRC to take full ownership. Let’s have formatting requirements set entirely in standards, rather than split between standards and legislation.”

Taking those points onboard, Death said: “It’s testament to the power of this event and others like it that if you’d asked me about that issue at the beginning of the day, I’d have said it’s not something we’re looking at, but the conversation has shown me that it should be something we’re looking at. So, it’s a question I’d like to take away and explore.”