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 | James Latham Plc (3) |
|---|---|
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | RSM UK Audit LLP |
| Case Summary / Press Notice |
Parent company cash flow statement and balance sheet We asked the company for further information about certain parent company working capital movements in its cash flow statement and its presentation of the bank overdraft as part of cash and cash equivalents in the balance sheet. The company provided the requested information and concluded that:
The company agreed to restate the comparative figures presented in the parent company cash flow statement and balance sheet in its next report and accounts. As the changes affected primary statements, we asked the company to disclose the fact that the matters had come to its attention as result of our enquiry. Foreign currency derivatives We asked about the effect of foreign currency derivatives on the measurement of the company’s inventories and revenue. The company provided a satisfactory response. |
| Entity | John Wood Group PLC (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice |
Exchange movements on disposal of foreign operations We asked the Company to explain why the net exchange movements on disposal of foreign currency operations of $54.5m, which was included in the statement of changes in equity, was not included within the statement of comprehensive income. The Company acknowledged the error and agreed to restate the statement of comprehensive income, by including this amount, in its next set of accounts. Significant estimates We enquired about the Company’s estimation uncertainty disclosures relating to liquidated damages and recognition of revenue from variation orders. The Company provided a satisfactory response and agreed to enhance their disclosures in the future. |
| Entity | Keystone Law Group plc (3) |
| Balance Sheet Date | 31 January 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | RSM UK Audit LLP |
| Case Summary / Press Notice |
Accrued income We requested further information about the measurement of accrued income and clarification of whether a provision against this balance was recorded. The company satisfactorily provided details of the method used to value accrued income and confirmed the amount of provision held was not material. As the method to calculate accrued income had historically proved to be accurate, we encouraged the company to reconsider whether there was a significant risk of material adjustment to the carrying amount in the next financial year that was required to be disclosed as a key source of estimation uncertainty. Alternatively, if the estimate of accrued income carried lower risk, having a smaller impact or crystallising over a longer timeframe, any disclosures provided should be clearly distinguished from those with a significant short-term effect. Expected credit losses We asked the company to explain its rationale for not presenting apparently material impairment losses on trade receivables on the face of the consolidated income statement, as required by IAS 1 ‘Presentation of Financial Statements’. Upon review, the company agreed to restate the 2023 comparative consolidated income statement in its 2024 accounts, to separately present the impairment charge, and agreed to disclose the fact that the matter had come to its attention as a result of our enquiry. Provisions We sought further information about the company’s provisions and the accounting for claims covered by insurance, which the company provided. In view of the amount of claims-related provisions, we encouraged the company to reconsider whether an accounting policy was necessary or, alternatively, if there were no material claims in the current or preceding year, to make a statement to that effect. |
| Entity | M&C Saatchi Plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice |
Cash flows on settlement of put options We asked the company to explain why cash paid on the settlement of put options, included as a staff cost in the income statement, was classified within financing activities, rather than operating activities, in the cash flow statement. We noted that these cash flows did not appear to fall within the IAS 7 ‘Statement of Cash Flows’ definition of financing activities. The company acknowledged that classification of these cash flows within operating activities would be more appropriate. Consequently, the company agreed to classify all cash payments relating to such put options within operating activities in the 2023 annual report and accounts and to restate the 2022 comparative amounts. As the restatement affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as a result of our enquiry. Headline results We asked for an explanation of why the company’s measure of headline results excludes from staff costs amounts relating to dividends paid to put holders and put option accounting. The company provided an explanation of its rationale for excluding these items and agreed to explain this in its future reporting. |
| Entity | Sosandar Plc (3) |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Saffery Champness LLP |
| Case Summary / Press Notice |
Impairment of loan to subsidiary We asked the company to explain the circumstances relevant to a loan to its subsidiary. In the comparative period it had been disclosed as having been waived but, in the year to 31 March 2023, it was shown as outstanding but fully impaired. The company explained that the change was required as the waiver had not been formalised but the loan was considered to be fully impaired because it was expected that it would be formally waived in the future. We were not persuaded by the company’s rationale that an intended waiver would result in an impairment. However, we did not consider it proportionate to pursue the matter further. The company agreed to enhance its disclosure of credit risk associated with the loan in its forthcoming financial statements. Company’s cash flow statement In response to our query about the presentation of cash flows relating to the loan to the subsidiary, the company explained that the increase in the gross amount of the loan was omitted in error, and agreed to restate the company’s comparative statement of cash flows in the annual report for 31 March 2024. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention because of our enquiry |
| Entity | St James's Place plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Cash flows on sale of business loans to partners We requested an explanation of the basis for classifying cash flows on sale of business loans to partners as investing given that the company classifies other cash flows arising from these loans as operating activities. The company acknowledged that it was more appropriate to classify the cash flows as operating and undertook to restate the consolidated cash flow statement accordingly. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as a result of our enquiry. |
| Entity | The Rank Group Plc (3) |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice |
Leases We asked the company to explain the difference between lease payments of £66.6m shown in the note of movements in lease liabilities, and £43.6m for lease principal payments shown in the cash flow statement. We also asked why the note of movements in lease liabilities showed £47.8m of additions to lease liabilities while another note showed only £19.1m of additions to right-of-use assets. The company explained the errors giving rise to these differences and agreed to restate the comparative amounts in the cash flow statement and associated notes in the 2024 annual report and accounts to:
As the latter change affected a primary statement, the company also agreed to disclose that this matter had come to its attention as a result of our enquiry. |
| Entity | Westcoast Group Holdings Limited (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
This company was selected as part of our thematic review of the UK's largest private companies and, as such, only disclosures included in the scope of the thematic were reviewed. Statement of cash flows We asked the company to explain why the interest expense on invoice discounting facilities had been classified as a financing activity when other information in the accounts suggested that the debt factoring related to a non-recourse arrangement, resulting in derecognition of the associated financial assets on factoring. The company confirmed that this interest expense related to an additional invoice discounting facility, which was an arrangement with recourse. It also explained the borrowings linked to this facility had been incorrectly classified as cash and cash equivalents in the cash flow statement and agreed to restate the comparative figures included in its next annual report and accounts. As the restatement affected a primary statement, we asked the company to disclose that the matter had come to its attention as a result of our enquiry. The company also agreed to provide additional disclosure about the with-recourse invoice discounting facility, including improved labelling of the associated borrowings, in future annual reports and accounts. |
| Entity | Aston Martin Lagonda Global Holdings plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice |
Parent company investments We asked the company to explain how the Directors had satisfied themselves that there was no impairment to recognise in respect of the parent Company’s investments in subsidiaries and the amounts due from group undertakings. As a result of our enquiry, the Company agreed to restate the comparative amounts in its next annual report to record an impairment in respect of the parent Company’s investment in subsidiaries, remove an expected credit loss charge in respect of amounts due from subsidiaries, and reclassify loans to subsidiaries from ‘Debtors: amounts falling due within one year’ to Debtors: amounts falling due in more than one year’. The company agreed to disclose the fact that these matters had come to its attention because of our enquiry. Provisions and contingent liabilities We asked the Company to explain how they had complied with the requirements of IAS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’ in respect of claims filed against the Company by Nebula Project AG. The Company provided a satisfactory response. |
| Entity | Hipgnosis Songs Fund Limited (3) |
| Balance Sheet Date | 30 September 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | PricewaterhouseCoopers CI LLP |
| Case Summary / Press Notice |
Accrued income It was not clear to us why the Usage Accrual was nil prior to March 2022. We also wanted to understand the impact of the increase in accrued income on amounts due to songwriters. The company provided a satisfactory explanation of the increase, and explained that the amounts due to songwriters arise from a different revenue stream than the usage accruals. Alternative Performance Measures (‘APMs’) We asked the company to explain the meaning and purpose of the new Distributable Revenues APM, and also explain the change in definition of Leveraged Free Cash Flow. The company provided the explanations requested, and offered to include additional disclosures in the 2023 Annual Report to:
We also challenged the prominence of the PFAR revenue metric and the absence of a reconciliation of this to IFRS revenue. The company offered to continue to expand and develop the analysis of IFRS revenue such that there is a more balanced approach in the 2023 Annual Report, with at least equal prominence. The company also explained the difficulties in providing a reconciliation between the PFAR metric and the IFRS revenues reported, and noted that it intends to transition away from using PFAR as an APM. In the light of this, we did not pursue this matter any further. Impairment of Catalogues of Songs We asked for a more granular explanation of the approach used to calculate the value in use of the Catalogues of Songs, including the key assumptions used and the sensitivity of the carrying value to changes in these assumptions. The company provided the requested information, and offered to disclose the discount rate used to calculate value in use, the fact that this is a major source of estimation uncertainty, and also any material impact of a change in this discount rate on the impairment charge in the March 2023 Annual Report. The company also offered to consider disclosing a quantitative sensitivity analysis on other inputs, including the projected earnings, in future reporting periods. We also requested further details of management’s judgement in determining appropriate Cash Generating Units (‘CGUs’) for the purposes of the impairment review. The company provided this, and offered to disclose an enhanced analysis of the key catalogues within the Kobalt Portfolio in the March 2023 Annual Report to increase clarity on the Kobalt Portfolio and its impairment review. Accrued dividends We asked for an explanation of the basis for accruing dividends declared but not paid in the interim accounts. After obtaining legal advice, the company confirmed that unpaid dividends are not a legally binding obligation. As a consequence of this, the company agreed to restate the next interim accounts to no longer show unpaid dividends as a liability of the company. As this change affected the primary statements, we asked the company to disclose that the matter had come to its attention as a result of our enquiry. |
| Entity | Hostmore plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Parent company’s investment in subsidiaries We asked the company about the basis on which the impairment test on the parent company investment in subsidiary undertakings was performed. Specifically, it was unclear whether subsidiaries’ liabilities, such as bank loans and leases, had been appropriately reflected. The company explained that it erroneously did not reflect the impact of external debt in the calculation of the value in use of the investment in subsidiary undertakings. Consequently, it recalculated a material impairment and agreed to restate the comparative parent company statement of financial position in its next annual report and accounts. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as a result of our enquiry. Calculation of adjusted basic and diluted earnings per share We queried whether the calculation of adjusted basic and diluted earnings per share included the effect of tax. The company explained that the tax effect of adjusting items is not removed and that this is consistent with its definition of this measure. The company agreed to clarify the disclosure in this regard. Consistency between going concern and impairment assessments As a result of additional information provided to us by the FRC’s Audit Quality Review Team, whose work was ongoing at the time of our correspondence, we asked the company about the consistency of assumptions used in its going concern and impairment assessments. We closed our enquiry after the company provided a satisfactory explanation. |
| Entity | Lords Group Trading plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | RSM UK Audit LLP |
| Case Summary / Press Notice |
Purchase of non-controlling interest We asked the company to explain its rationale for classifying the purchase of the non-controlling interest in Hevey Building Supplies Limited as a cash flow from investing activities in the consolidated statement of cash flows. The company agreed that it should have been classified as a cash flow from financing activities, given that the change in ownership interest had not resulted in a loss of control. The company agreed to restate the comparative figures included in its next annual report and accounts. As the restatement affected a primary statement, we asked the company to disclose that the matter had come to its attention as a result of our enquiry. Supplier rebates We noted that the Audit Committee Report explained that it could be complex to calculate the value of rebates that are not received before the audit sign-off date and there was a degree of estimation uncertainty in arriving at the value to be accrued. We also noted that the principal risks and uncertainties detailed in the Strategic Report, included ‘supplier management and rebates’. We asked the company to explain the basis on which the recognition and measurement of supplier rebates was not considered to be a significant estimate. We were satisfied with the explanation provided and encouraged the company to consider whether additional disclosures were required to help users to understand the extent of the estimation uncertainty outlined in the Audit Committee Report. We also queried the amount of accrued supplier rebates included within other receivables at the year-end. The company provided it and we noted it was a material component of total current trade and other receivables which should be presented separately from other receivables. The company agreed to such disclosure in future annual reports and accounts. |
| Entity | Rolls Royce Holdings Plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Cash flows on settlement of excess derivatives We asked the company to explain the basis for classifying the cash flows associated with the settlement of excess derivatives within financing activities in the Statement of Cash Flows, rather than operating activities, as the cash flows did not appear to fall within the IAS 7 ‘Statement of Cash Flows’ definition of financing activities. The company acknowledged that classification within operating activities would be consistent with the definition of the company’s net debt alternative performance measure, which excluded these derivatives. Consequently, the company has decided to amend its accounting policy and will present the settlement of excess derivatives cash flows within operating activities in the 2023 annual report and accounts and restate the 2022 comparative amounts. Payments in advance of performance The company disclosed significant current and non-current contract liabilities, representing instances where the customer has paid in advance of the company performing its associated obligations. We asked the company to describe the nature and anticipated timing of the contract liabilities disclosed, and how the company has considered the requirements of IFRS 15 ‘Revenue from Contracts with Customers’ regarding the existence of a significant financing component when measuring the associated contract revenue. The company explained the primary purpose for the customer’s payment in advance for these services is for reasons other than to provide financing to the customer. The company has agreed to enhance disclosures in future annual reports to explain management’s judgement in this area. Customer concession credits We asked the company to explain the nature of the contracts which include customer concession credits, how the credits have been reflected in the transaction price, and whether there was any significant judgement or estimation uncertainty associated with them. The company satisfactorily explained the various circumstances that led to these concessions and agreed to enhance disclosures in this area in future annual reports. Risk and revenue sharing agreements (RRSAs) – cash entry fees We asked for some clarification around the accounting treatment applied to RRSAs and the associated cash entry fees, such as why the fees are recognised as a reduction to cost of sales, and whether they differ from the ‘contributions and fees’ presented within the research and development note. The company satisfactorily explained their accounting policy further, and also confirmed that the amounts recognised in the income statement in relation to the RRSAs are not material. Provisions for onerous contracts and impairment testing We asked the company to further explain the impact on its onerous contracts provision of the amendment to IAS 37 ‘Onerous Contracts – Cost of Fulfilling a Contract’ and why no impairment loss had been recognised in respect of these assets before recognising a separate onerous contract provision. The company explained that the risk of impairment of the assets is relatively low, and that the assets have a significantly longer life than the contracts which have been recognised as onerous. Deferred tax assets Significant UK deferred tax assets were recognised in relation to carried forward tax losses which were expected to be recovered by the taxable profits generated by new civil aerospace large engine programmes over timeframes in excess of 30 years. Given that these programmes are typically loss-making in their investment phases, we asked the company to provide more detail about the timeframe over which the deferred tax assets were expected to be recovered. The company explained their judgements associated with the recognition and measurement of the assets and clarified that the forecasts of taxable profits only include existing engine programmes, with an assumption of a certain level of research and technology investment. The company confirmed that it would provide additional clarity over the timeframe of recovery of the deferred tax assets in the 2023 annual report. |
| Entity | Britvic plc (3) |
| Balance Sheet Date | 30 September 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2023 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice |
Share repurchase arrangements We asked the company to clarify the terms of its share repurchase arrangements and received a satisfactory response. The company agreed to enhance its accounting policy disclosure for any future share buybacks. Classification of intercompany loans receivable by the parent company We sought an explanation for the classification of all intercompany loans receivable by the parent company as current assets. The company acknowledged that a large part of the overall balance was not expected to be realised within 12 months of the balance sheet date and, accordingly, should be presented as non-current assets. The company agreed to revise the presentation and restate comparative figures in its 2023 annual report and accounts. Presentation of overdrafts and cash and cash equivalents We also noted that a reference to cash pooling in the notes to the financial statements did not state the extent (if any) of off-setting financial assets and liabilities. Having reviewed its arrangements, the company concluded that positive and negative balances in the cash pooling facility did not meet the criteria for net presentation. The company is revising its treatment of these balances and will restate comparative figures in its 2023 annual report and accounts, to show the gross amounts for overdrafts and cash and cash equivalents. Since these restatements affect a primary financial statement of the parent company and consolidated group, respectively, the company agreed to disclose in its 2023 annual report and accounts the fact that the matters had come to its attention as result of our enquiry. |
| Entity | Diamond DCO Two Limited (formerly Lloyds Pharmacy Limited) (3) |
| Balance Sheet Date | 31 March 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2023 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
Going concern We requested more information about the company’s conclusion that no material uncertainty in relation to the company’s ability to continue as a going concern was present at the date of approval of the financial statements, in the light of an ongoing strategic review following a change of ownership of the company. We also sought clarification of the extent of financial support provided by other group entities. The company explained that, as at the date of approval of the financial statements, the directors concluded that there was no material uncertainty over the ability of the company to continue to meet its liabilities as they fell due. The company further explained that, following a subsequent decision to dispose of the company’s remaining trade either to other entities within the group or to third parties, the company’s next financial statements will be prepared on a basis other than going concern. In closing the matter, we reminded the company that when assessing whether a material uncertainty exists, consideration should be given to uncertainties over the ability of the company to continue to trade following a potential reorganisation or restructuring, and not only to uncertainties over the company’s liquidity. We also observed that the disclosure requirements of IAS 1, ‘Presentation of Financial Statements’, apply to any key judgements made in concluding that there are no material uncertainties. Presentation of primary statements We questioned the presentation of a material impairment of tangible fixed assets outside operating loss for the year. The company agreed to present future tangible fixed asset impairment charges within operating profit/loss and to restate the income statement for the year ended 31 March 2022 accordingly in its next financial statements. The company agreed to disclose the fact that the matter had come to its attention as a result of our enquiry. We also asked for more information about the classification within current assets of amounts due from other group entities that had previously been presented as non-current assets. The company explained that these amounts were settled after the year end, and we closed our enquiry on this basis. Income tax We requested more information about the basis of calculation of the tax credit for the year, including the company’s group relief arrangements, and sought explanations for significant reconciling items in the effective tax rate reconciliation. The company satisfactorily responded to our enquiries. We asked the company to provide more information on the nature of the evidence supporting the recognition of a net deferred tax asset, given the company’s recent history of losses. In the course of our enquiry, the company identified additional information that enabled more accurate projections of the level of future taxable profits to be made. Consequently, the company agreed to derecognise the net deferred tax asset in full and to restate the 31 March 2022 financial information accordingly in its next financial statements. The company agreed to disclose the fact that the matter had also come to its attention as a result of our enquiry. Defined benefit pension scheme asset We sought clarification of the basis of recognition of a defined benefit pension scheme asset under IFRIC 14, ‘IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interactions’, as well as the calculation of the related deferred tax liability. The company satisfactorily explained that the asset was recognised based on the company’s unconditional right to a refund, after taking account of the effect of the trustees’ decision in March 2022 to initiate winding-up the scheme. The company explained that the related deferred tax liability had been calculated at a rate of 25%, and that the effect of the difference between this rate and the rate of 35% applicable to refunds from a pension scheme was not considered material. We closed our enquiry on this basis. |