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 Supervision Committee’s Operating Procedures, 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 | Abrdn Private Equity Opportunities Trust Plc |
|---|---|
| Balance Sheet Date | 30 September 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | Accsys Technologies PLC |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Alfa Software Holdings PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | RSM UK Audit LLP |
| Case Summary / Press Notice | N/A |
| Entity | Alphawave IP Group plc |
| 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 |
Elimination of gains from sales to a joint venture (JV) We asked the company to clarify the basis on which it did not eliminate the full amount of unrealised gains on sales made by the company to its JV. The company provided a satisfactory explanation. Credit balance included in cash and cash equivalents The company’s disclosure of financial assets by foreign currency indicated that a credit balance was included within cash and cash equivalents in the balance sheet. We asked how the company had concluded that the offsetting criteria in IAS 32 ‘Financial Instruments: Presentation’ had been met. In its response, the company explained the events that had resulted in the credit balance, and confirmed there were no other material credit balances within cash and cash equivalents. In the light of the particular circumstances, we did not consider it proportionate to pursue the matter further. |
| Entity | Amazon UK Services Ltd |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 2024 |
| Auditor (5) | Ernst & Young 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. Strategic report We asked the company to explain how its strategic report met the disclosure requirements in s414C of the Companies Act 2006. The company provided an explanation but also agreed to supplement future strategic reports with additional information to deliver a more comprehensive analysis of the development, performance and position of the business. Principal activities and revenue We asked the company to provide us with more detail on the nature of its principal activities and to explain the basis on which revenue is recognised for each significant revenue stream. The company provided this and agreed to include additional information about the nature of fulfilment and corporate support services and to clarify the associated revenue recognition policies in future annual reports and accounts. We also enquired about the basis on which disclosure of turnover by class of business and geographical market is considered seriously prejudicial to the interests of the company. In response, the company agreed to include an analysis of turnover by class of business and by geography in future annual reports and accounts. |
| Entity | Amedeo Air Four Plus Limited |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | KPMG Channel Islands |
| Case Summary / Press Notice |
Lease arrangements with Thai Airways We asked the company to explain the terms of the modified lease arrangements with Thai Airways, the accounting treatment applied and the effect on the accrued income balance. The company provided a satisfactory explanation and committed to enhance disclosures in its 2024 annual report and accounts to enable users to understand more clearly the effect of these modified leases on the accrued income balance. Non-current trade receivables We sought clarification of the nature of the non-current trade receivables balance that did not relate to Thai Airways and the basis on which the balance was classified as non-current. The company satisfactorily responded to our enquiries and agreed to include additional information about this balance in future annual reports and accounts. |
| Entity | Arnold Clark Automobiles Ltd (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 2024 |
| Auditor (5) | Deloitte 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. Sale of leased vehicles We asked the company to provide details of the accounting policy that it applies to the sale of vehicles which have previously been held for rental. The company provided the requested information and agreed to disclose the policy and enhance the related disclosures in its 2023 annual report and accounts. We also asked for clarification of the treatment of both rental and non-rental vehicles in the cash flow statement. The company explained how the cash flows for rental vehicles were in line with the requirements in IAS 7, ‘Statement of Cash Flows’, but acknowledged that the cash flows for non-rental vehicles should have been classified as investing, rather than operating, activities. The company agreed to restate the comparative amounts in its 2023 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. Cash equivalents We asked the company to explain how some balances recognised within cash equivalents were used to meet short- term commitments rather than being held for investment purposes. The company provided a satisfactory response and agreed to enhance the disclosure about these balances in its 2023 annual report and accounts. |
| Entity | Ashtead Group plc |
| Balance Sheet Date | 31 October 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Ausurus Group Ltd |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 2024 |
| Auditor (5) | KPMG 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. Turnover We asked the company for further information about the specific activities through which it generates turnover and the accounting policies adopted for them. The company provided the information requested and agreed to refine the disclosures in its 2023 annual report and accounts. We also requested an explanation of the reason for the company’s non-disclosure of its geographical turnover analysis. The company detailed its rationale for not including this disclosure historically but explained that it has reconsidered and proposed to disclose this in its 2023 annual report and accounts. Control assessment for equity investments We asked for clarification of the control assessment completed for certain entities, which was disclosed as a key judgement. The company detailed the specific entities which were subject to judgement and outlined the key contractual terms with other parties which formed the basis for the control conclusion in each instance. The company agreed to enhance the key judgement disclosure in its 2023 annual report and accounts to include this detail. |
| Entity | Begbies Traynor Group plc |
| Balance Sheet Date | 30 April 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Crowe U.K. LLP |
| Case Summary / Press Notice | N/A |
| Entity | Bellis Finco PLC |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 2024 |
| Auditor (5) | Ernst & Young 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. Acquisition of Arthur Foodstores Limited We asked the company for further information about its judgement that it did not control Arthur Foodstores Limited which was acquired during the year. The company provided a satisfactory explanation of the restrictions which prevented it from being able to direct the relevant activities of the company at the year end and the point, post year end, at which these restrictions were lifted and it obtained control. Wholesale revenue We asked for clarification of the wholesale revenue accounting policy, including the goods or services to which this applied and whether the company was acting as an agent or principal in each arrangement. The company explained its wholesale revenue streams for both fuel and groceries and the basis for these being recognised as agent and principal respectively. The company confirmed that it plans to update the accounting policy in its 2023 annual report and accounts. Incremental borrowing rate We asked the company for information about the determination of the incremental borrowing rates applied for new or modified leases, including the use of observable data from other geographical regions. The company provided a satisfactory explanation for the judgements it had made. |
| Entity | BlackRock Throgmorton Trust plc |
| Balance Sheet Date | 30 November 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Bluefield Solar Income Fund Limited |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | KPMG Channel Islands |
| Case Summary / Press Notice | N/A |
| Entity | BMW (UK) Manufacturing Limited |
| 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. Functional currency We asked the company to explain the key factors that were considered when determining the functional currency and whether this involved significant judgement under IAS 1 ‘Presentation of Financial Statements’. The company provided a satisfactory response and agreed to disclose details of the judgement in its 2023 annual report and accounts. |
| Entity | Cake Box Holdings 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) | MHA |
| Case Summary / Press Notice |
Other comprehensive income We identified a difference between the amounts of other comprehensive income reported in the Statement of Comprehensive Income (SOCI) and the Statement of Changes in Equity (SOCIE). We asked the company to explain the apparent difference, and where a deferred tax charge in respect of the revaluation of property, plant and equipment, had been recognised. The company agreed to restate the other comprehensive income comparatives in the SOCI in their next annual report and accounts to include the relevant deferred tax charge. The company also agreed to restate the comparative figures in the SOCIE to reclassify this deferred tax charge from retained earnings to revaluation reserves. As the changes affected two primary statements, we asked the company to disclose the fact that the matter had come to its attention as a result of our enquiry. Financial asset impairment We questioned why the financial asset impairment charge had not been disclosed separately on the face of the SOCI, as the amount was greater than audit materiality. The company agreed to restate the 2023 SOCI in the next annual report and accounts to show the financial asset impairment charge separately. It also agreed to disclose the fact that the matter had come to its attention as a result of our enquiry. Change in useful economic lives We questioned why a change in the useful economic lives of certain assets had been accounted for as a prior year adjustment. The company provided a satisfactory response. Franchisee deposits We asked the company to explain the accounting treatment applied to franchisee deposits. The company provided a satisfactory response and agreed to include an accounting policy in future sets of accounts. Franchise package revenue We sought to understand the way in which revenue from franchise packages was recognised. The company provided a satisfactory response. |