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 | 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 |
| Entity | Dixons Carphone plc |
| Balance Sheet Date | 27 April 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 | Drax Group 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 |
Significant estimates disclosure The company’s narrative reporting identified uncertainties associated with future developments in subsidy schemes and related initiatives to reduce production costs in the biomass generation business. We asked for information about how these uncertainties had been addressed in the company’s asset impairment assessments, and about which specific assumptions met the ‘estimation uncertainty’ criteria in IAS 1, ‘Presentation of Financial Statements’. The company gave a satisfactory explanation and committed to make clearer disclosures about these matters in its 2020 accounts. We also asked for an explanation of how these uncertainties had been considered in assessing the recoverability of deferred tax assets. The company provided a satisfactory explanation. Disclosure related to impairment tests We asked the company for further information about impairment sensitivity disclosures provided in respect of recently acquired generation businesses. The company provided a satisfactory response and agreed to clearly distinguish those disclosures which relate to ‘reasonably possible’ changes in key assumptions, which are required under IAS 36, ‘Impairment of assets’, from additional sensitivity disclosures provided voluntarily. Segmental reporting We requested information about the company’s segmental disclosures and overall reporting on changes in the relative importance of different fuel types to the business. The company provided a satisfactory explanation and a commitment to enhance narrative reporting on the changing mix of generation by fuel type. |
| Entity | Electrocomponents plc |
| Balance Sheet Date | 31 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 | FirstGroup plc |
| Balance Sheet Date | 31 March 2020 |
| 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 | Gama Aviation Plc |
| Balance Sheet Date | 31 December 2018 |
| 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 | GoCo Group 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 15 ‘Revenue from Contracts with Customers’ and, as such, only the disclosures relating to revenue recognition were reviewed. Disclosure about significant estimates We requested additional information about the estimation uncertainty associated with the accrued income balance. The company provided this information, including an explanation of how it estimates accrued income. It acknowledged that additional disclosure under IAS 1 ‘Presentation of Financial Statements’ about the significant estimation uncertainty associated with the balance should have been disclosed within the accounts. Where significant estimation uncertainty exists, the company agreed to disclose additional information about:
|
| Entity | Grainger plc |
| Balance Sheet Date | 30 September 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 | Hammerson 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 |