CRR Case Summaries and Entity-specific Press Notices
The FRC publishes, on a quarterly basis, summaries of its findings from recently closed reviews that resulted in a substantive question to a company (‘Case Summaries’). In addition, it publishes the names of companies whose reviews were closed in the previous quarter without the need for a substantive question. No Case Summary is prepared for such reviews.
Case Summaries, which are available for cases closed in the quarter ending March 2021 onwards, are included in the table below. As, currently, the FRC is subject to existing legal restrictions on disclosing confidential information received from a company, the Case Summaries can only be disclosed with the company's consent. Where consent has been withheld by the company, that fact is disclosed in the table.
From March 2018 until March 2021, the FRC published the names of companies whose reviews were closed in the previous quarter but did not prepare Case Summaries. However, on an exceptional basis, specific cases may be publicised through entity-specific Press Notices, which can also be found in the table below.
The FRC’s reviews are based solely on the company’s annual report and accounts (or interim reports) and do not benefit from detailed knowledge of the company’s business or an understanding of the underlying transactions entered into. They are, however, conducted by staff of the FRC who have an understanding of the relevant legal and accounting framework. The FRC’s correspondence with the company provides no assurance that the annual report and accounts (or interim reports) are correct in all material respects; the FRC’s role is not to verify the information provided but to consider compliance with reporting requirements. The FRC’s correspondence is written on the basis that the FRC (which includes the FRC’s officers, employees and agents) accepts no liability for reliance on its letters or Case Summaries by the company or any third party, including but not limited to investors and shareholders.
Key
- Only a certain number of CRR’s reviews result in substantive questioning of the Board. Matters raised may cover questions of recognition, measurement and/or disclosure.
- CRR’s routine reviews of companies’ annual reports and accounts generally cover all parts over which the FRC has statutory powers (that is, strategic reports, directors’ reports and financial statements). Similarly, CRR’s routine reviews of companies’ interim reports will generally cover all information in that document. Limited scope reviews arise for a number of reasons, including those conducted when a company’s annual report and accounts or interim report are selected for thematic review or reviews that have been prompted by a complaint. In accordance with the FRC's Operating Procedures, for Corporate Reporting Review, CRR does not identify those companies whose reviews were prompted by a complaint.
- The FRC may ask a company to refer to its exchanges with CRR when the company makes a change to a significant aspect of its annual report and accounts or interim report in response to a review.
- Case closed after 1 January 2021 but performed under operating procedures that did not allow for the publication of Case Summaries.
- From the quarter ended June 2023, the FRC started identifying the auditor of the annual report and accounts, or the audit firm that issued a review report on the interim report, that was the subject of the CRR review. This information was also back-dated for closed cases publicised from the quarter ended September 2022. Cases marked N/A relate to those published prior to September 2022 or interim reviews that did not have a review opinion.’
Case Summaries
CRR Case Summaries and Entity-specific Press Notices (Excel version)
| Entity | Aberforth Smaller Companies Trust plc |
|---|---|
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Johnston Carmichael LLP |
| Case Summary / Press Notice | N/A |
| Entity | Admiral Group Plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |
| Entity | Albion KAY VCT PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Johnston Carmichael LLP |
| Case Summary / Press Notice | N/A |
| Entity | Alpha Growth Plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | December 2024 |
| Auditor (5) | PKF Littlejohn LLP |
| Case Summary / Press Notice |
We asked the company for further information about the impact of IFRS 17 on the 2023 annual report and financial statements, as the audit opinion stated that ‘…[the auditor was] unable to obtain sufficient and appropriate supporting evidence to assess the impact of implementing IFRS 17 on the group’s financial statements’. The company provided further information showing that the group had issued insurance contracts that were within the scope of IFRS 17, however, it explained that the Board believed that while the financial statements did not fully comply with IFRS 17, the impact on net assets would not have been material and would be presentational only. The company agreed to fully implement the measurement, presentation and disclosure requirements of IFRS 17 in the 2024 annual report and accounts. In view of this undertaking and in the specific circumstances of the company, we did not consider it proportionate to take further action in respect of the 2023 annual report and financial statements. |
| Entity | Alpha Growth Plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | PKF Littlejohn LLP |
| Case Summary / Press Notice |
Consolidation of insurance subsidiaries We asked the company for further information about how the assets and liabilities of insurance subsidiaries had been presented in the consolidated financial statements, and the basis for presenting all assets and liabilities of insurance subsidiaries within a single asset and single liability line item in the consolidated statement of financial position, as this appeared to aggregate items which were not similar in nature. We also questioned why the cash and cash equivalents balances held by insurance subsidiaries were not reflected in the consolidated statement of cash flows. The company explained that the financial assets held by the insurance subsidiaries are held solely to back the associated liabilities and that the presentation was adopted to clearly identify this. However, after further consideration the company agreed to restate the consolidated statement of financial position by providing appropriate disaggregation of the assets and liabilities of the insurance subsidiaries. The company also agreed to restate the consolidated statement of cash flows to include cash and cash equivalents held by insurance subsidiaries. Revenue of Alpha International Life Assurance Company (AILAC) We asked the company for further information about the terms of the acquisition of Alpha International Life Assurance Company (AILAC), and in particular the point at which income in relation to AILAC was recognised. The company explained that control of AILAC was achieved upon receiving regulatory approval in November 2022, but also noted that a fee was charged for management and advisory services performed from August 2022. Segmental reporting We asked the company for an explanation of the basis on which they concluded that the company has a single operating segment. The company provided a satisfactory explanation; however, we noted that this matter should be kept under review as the company grows. Future impact of IFRS 17, ‘Insurance Contracts’ We questioned the company’s assertion that IFRS 17 would not have a material impact on the group, given the nature of the company’s business, and asked for further information about the nature of the contracts issued by the insurance subsidiaries. The company explained that the majority of the contracts issued by the insurance subsidiaries do not contain significant insurance risk but that it was assessing the impact of IFRS 17 on those contracts that do contain significant insurance risk. Recoverability of Interval Fund Expenses We asked the company for further information about the recoverability of the interval fund expenses recognised as a receivable by the company. The company provided a satisfactory explanation. TCFD disclosures We noted the limited TCFD reporting and asked the company to explain what additional or improved disclosures it expected to make in its next annual report and accounts. The company agreed to consider our thematic reviews and expand the TCFD disclosures in the next annual report and accounts. Earnings per share We questioned the calculation of diluted earnings per share, as options and warrants were shown to be dilutive, despite having a weighted average exercise price which appeared to be above the average market price of ordinary shares in the period. The company agreed to restate the calculation of diluted earnings per share in the next annual report and accounts. Other disclosures We asked the company to enhance its disclosures in relation to (i) key performance indicators (KPIs) in the strategic report, (ii) the management of capital, (iii) fair value of financial instruments, and (iv) liquidity risk. The company agreed to make a number of disclosure enhancements in its next annual report and accounts in these areas. |
| Entity | CAB Payments Holdings plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Forvis Mazars LLP |
| Case Summary / Press Notice | N/A |
| Entity | Card Factory plc |
| Balance Sheet Date | 31 January 2024 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2024 |
| Auditor (5) | Forvis Mazars LLP |
| Case Summary / Press Notice | N/A |
| Entity | Carnival Plc |
| Balance Sheet Date | 30 November 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Ceres Power Holdings plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | Dar Global PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | KPMG Audit LLC (Isle of Man) |
| Case Summary / Press Notice |
Revenue recognition We asked the company to explain its rationale for recognising revenue over time and the criteria used to identify thresholds for recognition of revenue from a development project. The company provided a satisfactory response and agreed to amend its accounting policy disclosure, clarifying that all revenue is currently recognised over time. Judgements and estimates We sought clarification of the company’s disclosures of key sources of estimation uncertainty. The company agreed to enhance its disclosure of key sources of estimation uncertainty, by specifying the nature of the uncertainty for certain matters where this was not clear, removing those matters which do not carry significant risk of a material adjustment in the following financial year and considering what additional quantitative information would assist users’ understanding of the potential effects of uncertainty. |
| Entity | Ecclesiastical Insurance Office plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Ecora Resources PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
Royalty and streaming arrangements subject to production risk We sought clarification of the accounting treatment applied to early-stage royalty and streaming arrangements subject to production risk. The company satisfactorily explained the basis on which it applied IAS 38, ‘Intangible assets’, or IAS 16, ‘Property, plant and equipment’, to these arrangements. West Musgrave royalty arrangement We asked the company to explain why the accounting treatment applied to one of its royalty arrangements differed to that applied to other apparently similar arrangements recognised and measured in their entirety under IFRS 9, ‘Financial instruments’. The company provided a satisfactory response. We requested details of the accounting treatment applied to royalty arrangements recognised and measured according to IFRS 9 once certain financial protection mechanisms in the contracts fall away. The company explained that no material contracts of this type have so far reached this stage. We closed our enquiries on this basis. |
| Entity | Empresaria Group plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | CLA Evelyn Partners Limited |
| Case Summary / Press Notice |
Revenue We asked the company to provide further information about the nature of the accrued income balance, and whether its calculation involved significant judgement. The company provided sufficient information, confirmed that the calculation did not involve significant judgement, and agreed to disclose an accounting policy for the balance in future annual reports. The company also explained how it applies the variable consideration constraint to permanent placement revenue. Impairment tests We noted that the company’s market capitalisation at the year-end was less than both consolidated and parent net assets, which is an indicator of impairment, and questioned the company’s impairment testing. In respect of the consolidated accounts, the company confirmed that its impairment tests covered all assets in cash-generating units that included goodwill, and that no impairments were identified. The company also agreed to clarify and extend its disclosures in respect of goodwill impairment reviews in future annual reports and accounts. In respect of the parent company accounts, the company confirmed that it performed impairment tests of amounts receivable from subsidiary undertakings, as well as investments in subsidiary undertakings. It agreed to provide additional disclosures in the parent company financial statements in future annual reports, particularly in relation to the key assumptions used and the associated significant estimation uncertainty. |
| Entity | EnQuest PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |
| Entity | Fintel Plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |