Publication
Horizon Scanning: Investigations and Enforcement
In this horizon scan, we focus on key developments affecting companies operating in the UK, including in light of the recent change in UK government.
Publication | October 2021
On October 6, 2021 the Financial Reporting Council (FRC) published a thematic review assessing the quality of Alternative Performance Measure (APM) reporting in the UK, five years after the implementation of the European Securities and Markets Authority Guidelines on APMs (ESMA Guidelines) and the introduction of the IOSCO statement on Non-GAAP Financial Measures (IOSCO statement). The review also follows on from the FRC’s most recent APM thematic review report, published in November 2017.
The FRC’s review found that, while companies generally provided good quality APM disclosures, their context needs to be better explained, particularly as profit-based APMs tended to be more favourable than their GAAP results. Companies should clearly define their APMs and explain why they are needed, but not give them greater focus than their IFRS or UK GAAP equivalents. The FRC note that relevant GAAP information can be obscured by high usage of alternative measures and companies are encouraged to consider the number of APMs that they present.
The FRC also note in the report that, following the UK’s exit from the EU, the FRC expect main market companies that use APMs to continue to apply the ESMA Guidelines since the FRC consider them to be consistent with the Companies Act 2006, which requires a strategic report to contain a fair, balanced and comprehensive analysis of a company’s business during the financial year and its position at the end of that year. Similarly, the FRC believe that AIM-quoted entities and other entities that use APMs should apply the ESMA Guidelines as they provide helpful guidance and reflect best practice.
Alongside the examples of better disclosure and opportunities for improvement identified throughout the report, the FRC expect companies to carefully consider whether the matters identified apply to them and amend their disclosures where necessary. In particular, the FRC expect companies to:
(FRC, Thematic Review - Alternative Performance Measures (APMs), 06.10.2021)
Publication
In this horizon scan, we focus on key developments affecting companies operating in the UK, including in light of the recent change in UK government.
Publication
As you begin planning for the upcoming financial year, it is likely that legal operations projects are on your radar. However, securing the necessary budget can be challenging. Our roundtable on October 1, ‘Preparing for FY2025 - Building a compelling business case’, will help you create compelling business cases for your legal initiatives.
Publication
This briefing is an updated version of our briefing first published in December 2017 and sets out some practical pointers for employers who wish to make changes to a pension scheme which may fall within the statutory definition of a “listed change”.
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