Shearman & Sterling LLP | FinReg | COVID-19: UK Regulators Issue Joint Statement on Financial Statement Requirements
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  • COVID-19: UK Regulators Issue Joint Statement on Financial Statement Requirements
    03/26/2020
    The U.K. Financial Conduct Authority, the Financial Reporting Council and the Prudential Regulation Authority have announced a number of measures and initiatives to assist firms during the current global coronavirus pandemic. These include:
    • a statement from the FCA on the publishing of audited financial reports for listed companies;
    • guidance from the FRC for companies preparing financial statements to be read in conjunction with PRA guidance on assessing expected loss under IFRS9; and
    • guidance from the FRC for audit firms.

    The FCA has announced that the timeframe for the publishing of audited annual financial reports for listed companies is now extended by two months. This means listed companies now have six months from the end of the firm's financial year, instead of four months, to publish their results. In addition, the FCA has requested that investors not draw adverse inferences on the basis of a company utilizing this extended time period.

    Similarly, the FRC has provided guidance to those companies who are in the midst of preparing financial statements. This guidance covers the considerations that should be taken into account when assessing whether material uncertainties exist and the requirement for full disclosure of any judgments, assumptions and estimates. Further to this, the PRA has encouraged firms to ensure that when making decisions they take account of the support packages currently being offered by the government.

    In addition to providing guidance to companies preparing financial statements, the FRC has published guidance for those firms conducting audits that may be affected by the coronavirus pandemic. The guidance covers a range of topics including: the acceptance of new audit engagements; planned audit approaches; materiality; compliance with laws and regulations; and group audits.

    View details of the FCA announcement on the publishing of audited financial reports for listed companies.

    View guidance from the FRC for companies preparing financial statements.

    View the PRA guidance on assessing expected loss under IFRS9.

    View guidance from the FRC for audit firms.

    Details of other regulatory responses to COVID-19 are available on our COVID-19 Research Center.

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