Newswire March 2025

AUDIT & ACCOUNTING

FRC issues updated guidance to support going concern reporting

Following a consultation, the Financial Reporting Council (FRC) has issued updated guidance on the ‘Going Concern Basis of Accounting and Related Reporting, including Solvency and Liquidity Risks’, to help companies demonstrate the assessments underlying their going concern conclusions, which can increase confidence from all stakeholders including investors who rely on these important disclosures.

The FRC comment that the non-mandatory guidance brings together the requirements of company law, accounting standards, auditing standards, listing rules, the UK Corporate Governance Code and other relevant regulation into one convenient place for those preparing reports, adding that it serves as a proportionate and practical guide for companies of different sizes to prepare high-quality, company-specific disclosures about their going concern conclusions.

For further information, please see our latest blog.

Virgin Media pensions case suggests challenges ahead for accounts preparers and auditors

A recent ruling in a case brought by the trustees of the NTL Pension Scheme against Virgin Media Ltd may have ramifications for accountants and auditors working with defined benefit pension schemes, or participating employers.

The Court of Appeal has upheld an earlier ruling that amendments to benefits in DB schemes contracted out of the state earnings-related pension needed written approval from a scheme actuary. As such, amendments made to relevant schemes during a window from 1997 to 2016 could be voided, potentially costing schemes millions and requiring complex adjusting entries for the schemes and their participating employers.

Whilst further court rulings are still expected, practitioners who are likely to be impacted should closely follow developments and be prepared for possible reporting implications.

International Accounting Standards Board issues a major update to the IFRS for SMEs Accounting Standard

The International Accounting Standards Board (IASB) has issued a major update to the IFRS for SMEs Accounting Standard, which (whilst not used in the UK) is currently required or permitted in 85 jurisdictions. The IASB comment that the Standard aims to balance the information needs of lenders and other users of SMEs’ financial statements with the resources available to SMEs.

Key elements of the update include a revised model for revenue recognition, the bringing together of requirements for fair value measurement in a single location and updated requirements for business combinations, consolidations and financial instruments.

The update is effective for annual periods beginning on or after 1 January 2027, with early application permitted in jurisdictions that adopt it.

UKEB call for comments: Draft Endorsement Criteria Assessment on the amendments to IFDRS 9 and IFRS 7 – Contracts Referencing Nature-dependent Electricity

The UKEB has published a Draft Endorsement Criteria Assessment (DECA) on the potential use in the UK of the IASB’s Amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent Electricity.

The Amendments are effective for annual reporting periods beginning on or after 1 January 2026, with early application permitted, subject to the UKEB’s decision to formally adopt them for use in the UK.

The UKEB invites stakeholders’ views on the DECA conclusions regarding potential UK adoption of the Amendments by 9 June 2025.

FRC launches public beta of digital tool to transform access to company data

The FRC has announced the public beta launch of its digital reporting Viewer, a new tool designed to improve free access to structured company reporting data.

The tool works by using iXBRL tagging to quickly and efficiently navigate to key information within publicly filed company financial statements. It is thought that around 88% of the 3.1m accounts published annually are available in this format. The FRC comment that this innovative tool represents a significant step forward in making company financial information more accessible and transparent to stakeholders.

SUSTAINABILITY ASSURANCE

European Commission simplifies rules on sustainability and EU investments

The European Commission has adopted a package of proposals to simplify EU rules, aiming to boost competitiveness, and unlock additional investment capacity. The European Commission comment that this is a major step forward in creating a more favourable business environment to help EU companies grow, innovate, and create quality jobs.

The European Commission state that these first ‘Omnibus' packages, bringing together proposals in a number of related legislative fields, cover a far-reaching simplification in the fields of sustainable finance reporting, sustainability due diligence, EU Taxonomy, carbon border adjustment mechanism, and European investment programmes.

The European Commission add the proposals will reduce complexity of EU requirements for all businesses, notably SMEs and small mid-caps (SMCs) including UK subsidiaries of EU groups, focus our regulatory framework on the largest companies which are likely to have a bigger impact on the climate and the environment, while still enabling companies to access sustainable finance for their clean transition.

You can read more via the Commission’s press release here.

ACCA warns of emerging risks for sustainable reporting assurance market

The ACCA have commented that while the UK sustainable reporting assurance market is currently working well, there is no room for complacency.

The ACCA has applauded the FRC for the timely study into the functioning of the sustainable reporting assurance market, but urges the regulator to continue to address the threats highlighted in the report.

Key findings in the Assurance of Sustainability Reporting Market study include concerns over the quality of the assurance provided, a drift towards domination of the market by the Big Four audit firms, market immaturity driven by the UK’s uncertain regulatory position and the lack of an established regulatory framework.

ICAS calls for urgent road map for sustainability assurance

The Institute of Chartered Accountants of Scotland (ICAS) has responded to the FRC’s publication of the final report from its Assurance of Sustainability Reporting Market Study, commenting that  ICAS’ long-standing position is that sustainability assurance professionals should be subject to robust performance and quality management, and ethical and independence standards to help establish a level playing field for all those involved in this kind of work.

ICAS urges the UK Government to outline its roadmap for sustainability assurance in the UK and to work with the FRC to establish an appropriate regulatory framework as a matter of urgency.

ICAEW

IAASB and IAF strengthen collaboration to enhance sustainability assurance

The International Auditing and Assurance Standards Board (IAASB) and the International Accreditation Forum (IAF) have formalised plans to collaborate, reinforcing a shared commitment to high-quality sustainability assurance. Both comments that the partnership aims to enhance trust in corporate sustainability disclosures by establishing a strong global framework for assurance.

ICAEW issues new factsheet on the FRS 102 periodic amendments

The ICAEW has published a technical factsheet, aimed at helping members understand and implement the amendments to the standard arising from the recent Periodic Review of FRS 102.

ICAEW updates TECH 10/12 Reporting to Third Parties

The updated guidance, from the ICAEW’s Audit & Assurance Faculty, assists practitioners who are required to report to third parties in the course of their engagements.

ICAEW issues new Monitoring Reports

The ICAEW has issued reports on the outcomes of its monitoring activities in the Probate and DPB (Investment Business) markets.

ICAEW issues new article on safeguarding audit quality

In Part 1 – safeguarding the quality of your audits, the first of a an upcoming three part series aimed at helping firms implement the requirements of ISQM1, the ICAEW looks at what firms should be looking to include in their monitoring activities and how they should aim to do it.  

2025 Audit Regulations changes: movement of audits and sole practitioner alternates

Following a consultation process, the ICAEW Regulatory Board (IRB) will be asked to approve updated Audit Regulations at its March 2025 meeting. The revised regulations introduce a notification requirement for registered audit firms when they are appointed to audits that are potentially complex or high risk, and a requirement for sole practice auditors to appoint an alternate.

UK announces largest sanctions package against Russia since 2022

Three years on from the invasion of Ukraine, the UK has imposed over 100 new sanctions directly targeting those who continue to aid the invasion. The new measures are intended to put further pressure on Putin’s energy revenues and also target Russia’s military machine, and the entities and supply networks in third countries it relies on.

The new sanctions identify 14 “New Kleptocrats”, some of whom are fronting up strategic sectors of Russia’s economy, producers and suppliers of goods to Russia’s military, North Korean officials, 13 Russian corporate entities involved in funnelling advanced European technology into Russia and specification of another 40 “shadow fleet” ships carrying Russian oil.

The amended list of those sanctioned can be found here.

FATF: Jurisdictions under increased monitoring – February 2025

FATF has continued to work with jurisdictions identified on its “grey list” as they report on the progress achieved in addressing their strategic deficiencies. The following countries have had their progress reviewed since October 2024: Bulgaria; Burkina Faso, Cameroon, Croatia, Democratic Republic of Congo, Kenya, Mali, Mozambique, Namibia; Nigeria, Philippines, South Africa, South Sudan, Tanzania, Venezuela, and Vietnam. Updated statements are available here.

ECCTA: guidance on meeting the Companies House identity verification standard

The government has provided helpful advice on how to comply with its new Companies House identity verification standard and confirms that its voluntary online identification service will be available from 8 April 2025.

ECCTA: guidance on being an Authorised Corporate Service Provider

The government has updated its guidance on registering as an Authorised Corporate Service Provider and confirmed that the launch date for the registration service will be available from 18 March 2025.

The outline transition plan has also been updated. 

TAXATION