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

  1. 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.
  2. 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.
  3. 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.
  4. Case closed after 1 January 2021 but performed under operating procedures that did not allow for the publication of Case Summaries.
  5. 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)

1348 case summaries
Entity JPMorgan American Investment Trust Plc
Balance Sheet Date 31 December 2023
Exchange of Substantive Letters (1) No
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) BDO LLP
Case Summary / Press Notice N/A
Entity Kingfisher plc
Balance Sheet Date 31 January 2024
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Limited
Quarter Published September 2024
Auditor (5) Deloitte LLP
Case Summary / Press Notice

This company was selected as part of our focus on issues arising in the retail sector and, as such, only disclosures included in the scope of this particular work were reviewed. Please see the Annual Review of Corporate Reporting 2023/24 for further information.

Impairment of property, plant and equipment

We asked the company to explain its methodology for allocating e-commerce sales and associated non-store costs to individual stores, when estimating the recoverable amount of each store as a cash-generating unit, and to quantify the proportions of sales and costs allocated. The company provided a satisfactory response and agreed to enhance its future disclosures to clarify for readers how e-commerce revenues and related costs are attributed to stores for the purposes of impairment testing.

Entity Luceco plc
Balance Sheet Date 31 December 2023
Exchange of Substantive Letters (1) No
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) KPMG LLP
Case Summary / Press Notice N/A
Entity Market Topco Limited
Balance Sheet Date 29 October 2023
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Limited
Quarter Published September 2024
Auditor (5) PricewaterhouseCoopers LLP
Case Summary / Press Notice

This company was selected as part of our focus on issues arising in the retail sector and, as such, only disclosures included in the scope of this particular work were reviewed. Please see the Annual Review of Corporate Reporting 2023/24 for further information.

Impairment testing of property, plant and equipment

We asked the company to explain its methodology for allocating online sales and associated costs to individual stores, when estimating the recoverable amount of each store as a cash-generating unit, and to quantify the proportions of sales and costs allocated. The company provided a satisfactory response and agreed to consider whether additional disclosures are required in its next annual financial statements.

Entity Marks Electrical Group plc (3)
Balance Sheet Date 31 March 2023
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) BDO LLP
Case Summary / Press Notice

Revenue recognition

We sought clarification of the accounting policies applied to revenue arising from installation services, credit arrangements, and extended warranties. The company satisfactorily responded to our enquiries and agreed to expand the policy disclosures in its next annual report to provide further detail on these transactions.

Equity investment

We requested details of the basis of the fair value measurement of an equity investment. The company explained that this represented an investment in a buying group and, having reconsidered the most appropriate accounting treatment, concluded that the amount due under the arrangement should be accounted for as a rebate receivable, with a corresponding reclassification from fair value gains to cost of sales in the consolidated statement of comprehensive income for the year ended 31 March 2023. 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.

Impairment of parent company investment in subsidiary

We asked for more information about the estimated recoverable amount of the parent company’s investment in its subsidiary. As a result of our enquiry, the company identified that a post-tax discount rate had been applied to pre-tax cash flows, resulting in an overstatement of the value in use. The company agreed to restate the carrying amount of its investment in its subsidiary as at 31 March 2022 to recognise a consequential impairment charge. As the restatement affected a primary statement, we asked the company to disclose the fact that this matter had also come to its attention as a result of our enquiry.

Entity Murray International Trust PLC
Balance Sheet Date 31 December 2023
Exchange of Substantive Letters (1) No
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) BDO LLP
Case Summary / Press Notice N/A
Entity NATS Holdings Limited
Balance Sheet Date 31 March 2023
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) BDO LLP
Case Summary / Press Notice

Amounts recoverable and payable under regulatory agreement with the Civil Aviation Authority

We asked the company to explain the basis for recognising amounts recoverable and payable under the regulatory agreement with the Civil Aviation Authority, as UK companies operating in other regulated industries, such as water and energy, do not recognise similar regulatory assets and liabilities on their balance sheets. The company explained that, due to there being no applicable IFRSs, it applied the requirements of IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ in developing an appropriate accounting policy. In accordance with IAS 8, it referred to the definitions of assets and liabilities in the 2001 ‘Framework for the preparation and presentation of financial statements’ and concluded that these were satisfied (‘2001 Framework’).

The company explained that, unlike many other regulated industries, air travel is a discretionary consumer expense, and thus it is susceptible to a greater volatility of demand. As protection against this risk, the company’s licence includes a traffic risk sharing mechanism whereby its exposure to air traffic volumes is capped. The company concluded that this important feature of the regulatory agreement helps provide it with control of future economic benefits arising from amounts recoverable under the regulatory agreement and supports asset recognition. In the light of this and other additional company-specific information provided and the fact that the IASB was unable to reach a conclusion on whether regulatory assets and liabilities could be recognised under the 2001 Framework, we did not consider it proportionate to pursue the matter further.

We closed our enquiry after the company agreed to enhance its disclosures of significant judgements made in developing its accounting policy, in future reports and accounts.

Entity NEXT plc
Balance Sheet Date 27 January 2024
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Limited
Quarter Published September 2024
Auditor (5) PricewaterhouseCoopers LLP
Case Summary / Press Notice

This company was selected as part of our focus on issues arising in the retail sector and, as such, only disclosures included in the scope of this particular work were reviewed. Please see the Annual Review of Corporate Reporting 2023/24 for further information.

Impairment testing of property, plant and equipment

We asked the company to explain the cash-generating units (CGUs) used to determine the recoverable amounts for impairment testing of property, plant and equipment, the methodology applied to allocate online sales and associated costs to the CGUs representing stores, and the proportions of sales and costs allocated. The company provided a satisfactory response and agreed to disclose the CGUs within its accounting policy in its next annual financial statements.

Entity Ocado Group plc
Balance Sheet Date 3 December 2023
Exchange of Substantive Letters (1) No
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) Deloitte LLP
Case Summary / Press Notice N/A
Entity Oncimmune Holdings PLC
Balance Sheet Date 31 August 2023
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) Crowe U.K. LLP
Case Summary / Press Notice

We asked the company to provide a chronology of events and additional information about the cash flows associated with the sale of two subsidiaries and the subsequent external debt refinance. The company provided sufficient additional detail about the transaction and the debt refinance to satisfy our enquiries.

Entity Places for People Group Limited (3)
Balance Sheet Date 31 March 2023
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) MHA
Case Summary / Press Notice

Consolidated statement of financial position

We identified that the format of the consolidated statement of financial position was inconsistent with the requirements of FRS 102, section 4, ‘Statement of Financial Position’ and Part 1 General Rules and Formats to the ‘Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008’ (‘the Regulations’).

The company agreed to restate the consolidated statement of financial position to be consistent with the requirements of the Regulations. The company also agreed to disclose the fact that this matter had come to its attention as a result of our enquiry.

Gain on debt breakage

We sought to understand the accounting treatment applied to debt breakage costs, and the associated financial liability.

The company explained the accounting policy applied and confirmed that there was no remaining debt breakage liability as of 31 March 2024. The company also committed to describe the accounting treatment applied in the 2024 annual report and accounts.

Consolidated statement of cash flows

We asked the company to reconcile certain items presented in the consolidated statement of cash flows to corresponding amounts reported elsewhere in the annual report and accounts. The company provided satisfactory reconciliations.

Cladding remediations

We sought to understand the accounting treatment applied to cladding remediation costs. The company provided a satisfactory response.

Parent company statement of changes in equity

We asked the company to explain why a parent company statement of changes in equity had not been presented. The company confirmed there were no entries to record in the parent company statement of changes in equity and that future sets of accounts will include an explanatory statement to this effect.

Other group interests

In response to our question about the accounting treatment applied to the investment in Ansaar Management Company (Private) Limited, the company explained that the investment was accounted for as an associate.

Entity Porvair plc
Balance Sheet Date 30 November 2023
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) RSM UK Audit LLP
Case Summary / Press Notice

Consolidated cash flow statement

We asked the company to explain the basis on which cash outflows associated with the settlement of debt following the acquisition of Radiolab were classified as investing rather than financing. The company provided a satisfactory response. In closing this matter, we observed that the accounting policy applied in determining that the cash flows should be treated as investing, should be disclosed.

Retirement benefit obligation

We asked the company to explain the basis on which a liability had not been recognised for the annual contributions to be made to the pension scheme in respect of past service costs. The company provided a satisfactory response and agreed to disclose this basis in the next annual report and accounts.

Entity Revolut Group Holdings Ltd
Balance Sheet Date 31 December 2022
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) BDO LLP
Case Summary / Press Notice

Deferred tax assets

We requested information about the recognition and expected utilisation of deferred tax assets in respect of unused tax losses and share-based payments for the year ended 31 December 2022. The company satisfactorily responded to our queries and has provided additional disclosure in the annual report and accounts for the year ended 31 December 2023.

Negative customer balances

We asked the company to clarify how the expected credit loss provision is determined for negative customer balances. In addition, we asked the company to explain the write-off policy in respect of such balances. We received a satisfactory response and the company has added further explanation in respect of this matter in the annual report and accounts for the year ended 31 December 2023.

Gains on derivatives

We sought further information about what the net yield on foreign exchange derivatives presented in ‘other income’ represents and how this item was treated in the consolidated statement of cash flows. The company’s response was satisfactory and has provided further information to explain the treatment of gains or losses on foreign exchange derivatives in the annual report and accounts for the year ended 31 December 2023.

Entity RWS Holdings plc
Balance Sheet Date 30 September 2023
Exchange of Substantive Letters (1) Yes
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) Ernst & Young LLP
Case Summary / Press Notice

Contingent payments linked to continuing employment

We asked the company for information about its presentation in the consolidated statement of cash flows of contingent payments that are linked to continuing employment. The company identified that such payments had been classified incorrectly as investing cash flows for the year ended 30 September 2023. The company explained that the amount classified incorrectly was not material but agreed to report items of a similar nature in cash flows from operating activities in the future.

Entity Synthomer plc
Balance Sheet Date 31 December 2023
Exchange of Substantive Letters (1) No
Scope of Review (2) Full
Quarter Published September 2024
Auditor (5) PricewaterhouseCoopers LLP
Case Summary / Press Notice N/A