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 | CRH plc |
|---|---|
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | September 2023 |
| Auditor (5) | Deloitte Ireland LLP |
| Case Summary / Press Notice |
Impairment testing of goodwill We asked the company to explain certain aspects of its impairment testing methodology relating to the inclusion of forecast capital expenditure associated with achieving 2025 carbon reduction targets in its value in use calculations, and the basis for forecasting cash flows for a period exceeding five years. We also asked the company for an explanation of how climate change had been incorporated in the impairment testing methodology and assumptions. The company explained that forecast capital expenditure included in impairment testing relating to achieving 2025 carbon reduction targets did not represent enhancement expenditure, as it maintained current performance rather than increasing capacity, and that it was, therefore, appropriate to include this expenditure and the resulting cash flows in its value in use calculations. The company enhanced the disclosures in its 2022 annual report and accounts to make this clear. The company also explained the circumstances in which it may use a period of longer than five years for cash flow forecasting purposes in impairment testing, and that it had not made any adjustments to cash flows beyond the five year strategic plan horizon under this approach in 2021. It updated the disclosures associated with this policy. The company satisfactorily explained how climate-related risks, including the risk of increased future carbon costs, had been incorporated into the value in use assessments used in its impairment testing of goodwill. The company enhanced these disclosures in its 2022 annual report and accounts by disclosing the assumptions applied in respect of future carbon costs, including the anticipated ability to recover increased carbon costs through pricing, as well as the impact of applying carbon cost assumptions from a Paris-aligned global warming scenario on these value in use assessments. The company also included detailed considerations of climate risk in the context of its accounting for property, plant and equipment. We closed our enquiries on the basis of these helpful additional disclosures. |