Ahead of the 2021 interim reporting season, a recent thematic review by the Financial Reporting Council (FRC) has highlighted examples of good practice in company’s interim reporting and areas where further improvements are required by those responsible for preparing interim reports.
The FRC reviewed the reports of 20 quoted companies across a range of industries to assess the quality of interim reporting. Timely and reliable interim reporting is vital for investors, creditors and other stakeholders to properly understand a company’s financial position, performance and liquidity.
Overall, the FRC was pleased with the quality of interim reports, with most companies considering the FRC’s Covid-19 recommendations and guidance to enhance disclosures, particularly in relation to going concern and the statement of cash flows and related notes.
The key observations that the FRC has made in its thematic review are as follows:
In order to assist preparers of interim reports; KPMG has produced its latest guide to condensed interim financial statements here. The guide is intended to help entities to prepare and present condensed consolidated interim financial statements in accordance with IAS 34 Interim Financial Reporting
Additionally, the FRC has issued revised International Standard for Review Engagement (UK) 2410 (ISRE (UK) 2410) Review of Interim Financial Information Performed by the Independent Auditor of the Entity. The updated ISRE 2410 (Dated May 2021) is effective for reviews of interim financial information for periods commencing on or after 15th December 2021, however, early adoption is permitted.
The key revisions of the standard are as follows: