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The reports analyse the disclosures in a sample of companies’ June 2018 interim reports in relation to the adoption of the new standards and provide examples of better practice in explaining their effect. The FRC expects other companies to use these examples to benchmark the quality of their own disclosures in their upcoming annual reports and accounts.
IFRS 15
Clear identification and explanation of performance obligations, a new concept introduced by IFRS 15, with a focus on judgements made both in their determination and when they are considered to be satisfied; the impact of the standard on the balance sheet to also be addressed, including accounting policies for contract assets and liabilities.
IFRS 9
The FRC encourages companies to invest sufficient time during their year-end preparation to ensure that transition disclosures are comprehensive and company-specific.
The FRC will challenge companies who do not provide an adequate level of disclosure about the impact of the new standards through their regular accounts review process next year.
Follow-up thematic reviews planned for 2019/20
The FRC will continue to supplement its routine monitoring programme with thematic reviews of aspects of corporate reporting where there is both stakeholder interest and scope for improvement and learning from better practices.