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FRC Review of IFRS9/15 Implementation

The FRC has published a Thematic Review of disclosures following the introduction of IFRS 9 / 15, and their Press Release accompanying the Thematic Reviews states:

“Companies have responded positively to newly introduced reporting requirements for Revenue Recognition and Financial Instruments but there is still considerable scope for them to improve the quality of their annual report disclosures.  The findings relate to three thematic reviews conducted by the Financial Reporting Council (FRC) to analyse companies’ disclosures for the new requirements and for existing requirements on the Impairment of Non-financial Assets.

The implementation of IFRSs 9 and 15, which applied for the first time to 2018 year-ends, represented significant challenge and change for many companies, following a period of relative stability in terms of financial reporting requirements.

The FRC recognises the significant work that was undertaken in preparing for, and complying with, the new requirements.  It takes time for such wide-ranging standards to be embedded but there were many examples of good disclosures within the accounts sampled and which are shared in the reviews published today.

However, as expected, there is considerable scope for companies to improve the quality of their disclosures which will be a focus of future reviews in the early years of application of the new standards.  The FRC encourages all companies to review the reports in detail and consider the findings carefully when preparing their future reports and accounts."