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 | Barclays PLC |
|---|---|
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Biffa plc |
| Balance Sheet Date | 27 March 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
This company was selected as part of our thematic review related to the application of IFRS 15 ‘Revenue from Contracts with Customers’ and, as such, only the disclosures relating to revenue recognition were reviewed. Revenue accounting policy We could not discern from the company’s disclosures: (i) the nature of the performance obligations satisfied over time, (ii) which criterion for over-time recognition had been met or (iii) the specific methods used to measure progress of delivery of the over-time performance obligations. The company agreed to enhance its accounting policy for revenue recognition to enable users to understand the performance obligations arising in different contracts and the point, or period over which, these were satisfied. Variable consideration We asked for further information about trade discounts and commodity rebates arising in the company’s contracts with customers, as these pricing features typically represent forms of variable consideration. The company clarified that the calculation of trade discounts and commodity rebates did not involve estimation uncertainty and, accordingly, application of the variable consideration constraint was not necessary. We suggested it would be helpful to users if the company provided a more detailed description of commodity rebates in its accounts. |
| Entity | Britvic PLC |
| Balance Sheet Date | 29 September 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Bunzl plc |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Burberry Group plc |
| Balance Sheet Date | 28 March 2020 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Cadogan Petroleum Plc |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Relationship with Proger Managers & Partners Srl (PMP) We asked the company to explain whether a call option it held over the shares of PMP, together with the right to appoint two directors of PMP, gave rise to significant influence. We accepted the company’s rationale that it did not have significant influence. Fair value assessment of the loan to PMP The annual report and accounts disclosed that the company had been unable to obtain relevant financial information from PMP in order to perform a fair value assessment at 31 December 2019. In the light of this, we asked for further information about how the company had determined fair value. We accepted the company’s approach to determining fair value. The company agreed to improve the disclosures around fair value measurement in accordance with IFRS 13 ‘Fair Value Measurement’ and, to the extent that the IFRS 13 disclosures do not sufficiently explain estimation uncertainty, IAS 1 ‘Presentation of Financial Statements’. Accounting policy for cash and cash equivalents We asked the company to clarify what maturity threshold is used for determining which short-term investments qualify as cash equivalents for the purposes of IAS 7 ‘Statement of Cash Flows’. The company confirmed that it made this assessment by reference to their maturity from acquisition and agreed to clarify the accounting policy and the nature of amounts within cash and cash equivalents in its 2020 annual report and accounts. |
| Entity | Caledonia Investments plc |
| Balance Sheet Date | 31 March 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Alternative performance measures (‘APMs’) We asked the company to clarify how the ongoing charges ratio had been calculated. Although a methodology for the calculation was disclosed in the report and accounts, we were unable to reconcile the ongoing charges ratio using numbers from the accounts. The company agreed to provide reconciliations of APMs in future annual reports where the basis of computing an APM cannot be immediately derived from amounts in the financial statements. |
| Entity | Capita plc |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
This company was selected as part of our thematic review related to the application of IFRS 16 ‘Leases’ and, as such, only the disclosures relating to leases were reviewed. Purchase of leased property We asked for information on the company’s accounting for the acquisition of a property it had been leasing previously, and an explanation of the basis on which this complied with IFRS 16. We also requested a reconciliation between the various amounts disclosed in the report and accounts relating to the transaction. The company satisfactorily explained that the lease contract did not contain a purchase option and, therefore, it was correct not to anticipate the property acquisition until it had occurred. It provided a reconciliation that demonstrated how various amounts in the report and accounts related to each other. |
| Entity | Celtic plc |
| Balance Sheet Date | 30 June 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Cemex Investments Limited |
| Balance Sheet Date | 31 December 2017 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Centrica Plc |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Estimated useful life We questioned the basis on which the directors estimated the life of Sizewell B Nuclear Power Station. This was relevant for estimating the recoverable amount of the investment in Lake Acquisitions Limited. The company responded satisfactorily to our enquiry. Revenue recognition The company had disclosed an accounting policy referring to application of the entitlement method to revenue from working interests in the production of natural gas, oil and condensates. This policy is generally not applied under IFRS 15 ‘Revenue from Contracts with Customers’. The company explained that this accounting policy had not been applied, and was disclosed in error and would be removed from future accounts. Restructuring programmes We asked for more information about the cost efficiency programme expenses treated as exceptional items. The company provided this information and undertook to disclose additional detail about the anticipated timetable, cumulative incurred costs and total estimated costs for any multi-year restructuring programmes in future accounts. |
| Entity | Clarkson PLC |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Computacenter plc |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Contract provisions We asked for clarification of the disclosures regarding the range of potential outcomes in relation to contract provisions. The company explained that an amount had been disclosed in error and clarified what was intended. If contract provisions are considered a major source of estimation uncertainty at future reporting dates, the company agreed to enhance the related disclosures and include information about the range of reasonably possible outcomes. |
| Entity | Countrywide plc |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Crest Nicholson plc |
| Balance Sheet Date | 31 October 2019 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |