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 | PZ Cussons plc (3) |
|---|---|
| Balance Sheet Date | 31 May 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Discontinued operations We asked the company to explain why the gain on sale from certain businesses appeared to have been presented as part of continuing operations. The company acknowledged that the gain on sale should have been presented as part of discontinued operations. It agreed to restate the comparatives in its next annual report and accounts to correct this. We also questioned the cash flow statement presentation of the consideration from the disposal of a business which had been presented within cash flows from operating activities. The company acknowledged that the disposal proceeds should have been presented as part of investing activities. It agreed to restate the comparatives in its next annual report and accounts to present the cash flows from the disposal within investing activities. Since these restatements affected the primary financial statements, we asked the company to disclose the fact that the matter had come to its attention as result of our enquiry in its next annual report and accounts. Impairment We asked the company for further information on the assumptions used in the impairment assessment of goodwill and intangible assets. The company provided satisfactory responses to our questions. The company acknowledged that a change in the methodology used to derive the discount rate in the year should have been disclosed in accordance with paragraph 39 of IAS 8, and that clearer narrative disclosures of the reason for the impairment would have been appropriate. Alternative performance measures We questioned why EBITDA did not appear to have been adjusted for amortisation. The company explained that there was an error in the FY19 calculation of EBITDA and in the FY20 presentation of the reconciliation of EBITDA. The company agreed to correct these in the next annual report and accounts. Exceptional items We asked the company why certain exceptional items were not representative of the underlying trading of the company, given they appeared to occur each year. The company provided the requested explanations, and also noted that in future it does not plan to identify items as exceptional in the income statement. Interim Financial Information to 30 November 2020 We asked the company for an explanation of why foreign exchange reserves associated with Nutricima were not reclassified to profit or loss on disposal in the six months ended 30 November 2020. The company explained that it did not consider the disposal of the trade and assets to meet the definition of a full or partial disposal as described by IAS 21, and that the amounts would be reclassified to profit or loss when this definition was met during the 6 months ended 31 May 2021. |
| Entity | Anexo Group Plc (3) |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | September 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
This company was part of our thematic review of cash flow and liquidity disclosures and, as such, only the disclosures relating to the cash flow statement and liquidity were reviewed. Invoice discounting facility in the cash flow statement We asked the company why an invoice discounting facility was included within cash and cash equivalents in the cash flow statement as the balance did not appear to fluctuate between negative and positive. The company acknowledged that the invoice discounting facility did not meet the criteria for classification as cash and cash equivalents, and agreed to restate the comparatives in its next report and accounts to present the cash flows from the facility within financing activities. New lease arrangements The statement of cash flows presented a cash inflow within financing activities, in relation to new leases. We asked the company to explain this presentation because cash flows would not usually arise on the inception of a lease. The company acknowledged that the cash flow statement had been incorrectly grossed up for a non-cash transaction. The company agreed to restate the comparatives in its next report and accounts to remove the gross up associated with leases. The company also agreed to present cash flows associated with hire purchase leases and other leases within a single line in the statement of cash flows. As the changes to both the composition of cash and cash equivalents, and the presentation of cash flows from leases affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as result of our enquiry. |
| Entity | City of London Investment Group PLC (3) |
| Balance Sheet Date | 30 June 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | September 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Lawfulness of dividends and share repurchases We observed that over a number of years, the company’s dividends and share repurchases exceeded retained earnings and other reserves available for distribution as shown in the annual accounts. No interim accounts were filed at Companies House to support the distributions, as required by section 836(2)(a) of the Companies Act 2006 (the Act). We asked how the directors were satisfied that the distributions were lawful. The company acknowledged that its historical distributions did not comply with the requirements of the Act, and explained the steps that it intended to take to rectify the situation. We closed the matter on the basis that the company had taken legal advice and satisfactorily explained how it intended to rectify the unlawful distributions. Cash flow statement - classification of acquisition-related expenses We questioned why acquisition-related expenses of £1,248k were classified as investing activities, rather than as operating activities in the cash flow statement. The company acknowledged that it was not appropriate to classify the amounts as investing cash flows because paragraph 16 of IAS 7, ‘Statement of Cash Flows’, explains that only expenditures relating to amounts recognised as assets in the statement of financial position can be classified as investing activities. It agreed to restate the comparative cash flow statement in its next accounts to classify the amounts as operating cash flows. Consolidation of the International REIT fund Disclosures in the report and accounts indicated that the company’s investment in the International REIT fund was consolidated on a net asset basis. It was unclear how the method of consolidation complied with IFRS 10, ‘Consolidated Financial Statements’. The company confirmed that the International REIT fund was consolidated on a line-by-line basis, as required by paragraph B86 of IFRS 10, and agreed to clarify its disclosures in future accounts. Nature of interest in the EM REIT fund The company disclosed that it had stopped consolidating its EM REIT fund after a substantial investment in the fund by a client, which reduced the company’s holding to 21%. We asked the directors to explain why the company does not control or have significant influence over the fund. We were satisfied with the company’s analysis that it did not control the fund, and with its basis for concluding that the control assessment did not require significant judgement. The company also provided a satisfactory analysis to support its conclusion that it did not have significant influence and committed to disclosing the matter as a significant judgement in its next accounts. |
| Entity | Eden Research plc (3) |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | September 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Transactions with associate We asked for more information about the group’s sale of geraniol to its associate and the group’s acquisition of an intangible asset from the associate. We also queried the existence of, and accounting for, any unrealised gain or loss (in applying the equity method) arising from such transactions. The company explained that it had reconsidered the guidance in IFRS 15 'Revenue from Contracts with Customers' in relation to its arrangement with the associate for the sale of geraniol. As a result, the company acknowledged that the group accounts (in addition to recognising the group’s share of the result of the associate through the normal equity accounting) should have recognised revenue based upon the margin it was entitled to receive from the associate’s sale of geraniol instead of on a gross basis. Consequently, the company agreed to restate comparative amounts in the following year’s income statement accordingly. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as result of our enquiry. The company provided a satisfactory explanation in respect of the purchase of the intangible asset. The company also acknowledged that there was a gain on the sale of the intangible asset by the associate for which its share had not been eliminated when preparing the group accounts, but explained that the adjustment was considered immaterial. Impairment review of investment in associate We requested information about the impairment review performed for the company’s investment in its associate, Terpene Tech (UK). The company provided a satisfactory analysis of the assessment performed. The company agreed to enhance the disclosure in respect of the impairment review in future annual accounts, including an improved analysis of the key assumptions made. Investment in subsidiary We asked the company to clarify its judgement made in determining that the company controls Terpene Tech (Ireland). The company provided a satisfactory explanation and agreed to improve the disclosure in future annual accounts to more clearly explain the basis for its conclusion. |
| Entity | Mothercare plc (3) |
| Balance Sheet Date | 28 March 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | September 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Revenue recognition We asked the company to provide further information about the basis for recognising revenue from sales of goods to franchise partners on dispatch of those goods. The company’s response satisfactorily addressed our concern. The company will enhance the wording of its accounting policy in future accounts to explain its rationale. Earnings per share The loss from continuing operations did not appear to have been used as the control number when determining whether the potential ordinary shares were dilutive for the purposes of diluted earnings per share from continuing and discontinued operations and from discontinued operations. The company confirmed that it did not use the loss from continuing operations as the control number and that it would restate the 2020 amounts presented for EPS from continuing and discontinued operations and from discontinued operations. The company agreed to include an FRC reference in its 2021 accounts explaining that the enquiry from the Financial Reporting Council led to the correction. The diluted loss per share from continuing operations was determined in accordance with IAS 33 ‘Earnings per Share’. We also asked for further information about the determination of the weighted average number of shares used in the diluted EPS amounts. The company explained that the number had been calculated incorrectly and that it would present restated amounts for 2020 in its 2021 accounts. Related parties We queried whether the directors considered a certain shareholder to be a related party. This shareholder had an interest in excess of 20% of the company’s ordinary share capital on 28 March 2020 and had provided a loan to the company in 2019. The company confirmed that the shareholder was a related party and that it would give the disclosures required by IAS 24 ‘Related Party Disclosures’ in future accounts. |
| Entity | Oxford Instruments plc (3) |
| Balance Sheet Date | 31 March 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | September 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Revenue recognition accounting policy We asked the company to clarify certain aspects of its revenue recognition policy, including the method used to allocate transaction prices to performance obligations, and how it had concluded that contracts for the sale and installation of complex systems contained a single performance obligation. The company satisfactorily addressed our questions and agreed to enhance the accounting policy in its next accounts. Customer deposits and deferred income We requested additional information to assist us in understanding the nature of customer deposits of £45.3m included in trade and other payables. In particular, we wanted to understand whether the amounts represent obligations to transfer goods and services under IFRS 15, ‘Revenue from Contracts with Customers’, and if so, how the company met the relevant disclosure requirements. We also asked whether there was a distinction between the customer deposits and deferred income. The company satisfactorily explained that the customer deposits and deferred income are contract liabilities under IFRS 15, as they represent obligations to transfer goods and services. It also committed to enhance the disclosures included in its next accounts to clarify the matter and to disclose the information required by IFRS 15. Bank loans and overdrafts We questioned why bankloans and overdrafts in the parent company accounts were higher than those in the consolidated accounts. The company acknowledged that, in its consolidated accounts, it had inappropriately offset positive bank balances and overdrafts that did not meet the offsetting criteria in paragraph 42 of IAS 32, ‘Financial Instruments: Presentation’. The company agreed to restate the comparative balance sheet in its next accounts by presenting the positive bank balances and overdrafts separately, and committed to provide the disclosures required by IFRS 7, ‘Financial Instruments: Disclosures’, where relevant. Cash flow statement - classification of disposal-related expenses We asked for the company’s rationale for classifying disposal-related expenses as investing activities in its cash flow statement. The company provided a satisfactory explanation and we closed the matter. Alternative performance measures (APMs) We identified a number of areas where improvements could be made to the presentation of the company’s APMs. The company accepted our observations and committed to provide reconciliations for all its APMs in future annual reports, and to ensure that APMs are not given more prominence than IFRS measures. |
| Entity | Telecom Plus plc (3) |
| Balance Sheet Date | 31 March 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | September 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Significant estimate: revenue recognition We asked the company to provide further information about the estimation uncertainty relating to revenue from non-smart meter customers, including the carrying amounts of associated balances and sensitivities or ranges of reasonably possible outcomes. The company agreed to enhance its disclosure about this significant estimate in future annual reports and accounts. Expected credit losses We asked for an explanation of the basis on which the allowance for credit losses had been calculated and for clarification as to whether the non-current financial assets had been assessed for impairment. Additionally, we asked for further information about the requirement of paragraph 35M of IFRS 7, ‘Financial Instruments; Disclosures’, to disclose, by credit risk rating grades, the gross carrying amount of financial assets. The company confirmed that non-current financial assets are assessed for impairment and agreed to augment its disclosures to include details of the inputs, assumptions and estimation techniques used to calculate expected credit losses in future annual reports and accounts. The company explained that the key determinants in calculating expected credit losses for trade receivables are ageing and whether an indebted customer remains with the Group. Disaggregated gross trade receivables and the corresponding expected credit losses will be presented on this basis in future annual reports and accounts. Impairment charge in the year Given the materiality of the credit loss impairment charge in the year, we questioned why this had not been disclosed separately on the face of the statement of comprehensive income as required by paragraph 82(ba) of IAS 1. The company agreed to separately show the credit loss impairment charge on the face of the statement of comprehensive income in future annual reports 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 result of our enquiry. |
| Entity | Wizz Air Holding Plc (3) |
| Balance Sheet Date | 31 March 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | September 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Sale and lease-back transactions We asked the company for further information on gains and losses on sale and leaseback transactions. The company provided this information noting that, in the year under review, total gross gains were immaterial and that no losses had been incurred. We encouraged the company to clarify its future disclosures in light of our enquiries in this area. On-board catering revenues We sought an explanation of how the company had concluded that it acts as agent, rather than principal, in respect of on-board catering services. We were satisfied with the explanation provided. Cash and cash equivalents We asked the company to explain the basis on which financial assets with an original maturity of between three and 12 months had been classified as ‘cash equivalents’. Following correspondence and discussions with the company, it agreed to separate from cash and cash equivalents deposits with an original maturity of greater than three months, even if they were accessible within three months at insignificant cost, where those deposits were being held for purposes other than meeting short-term cash commitments. In accordance with IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, the company accounted for this change as a prior period adjustment in its annual report and accounts for the year ended 31 March 2021. 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. Other enquiries In view of the proximity of our enquiries to the company’s 2021 reporting date, we asked the company to consider some observations in respect of disclosures included in its 2020 annual report and accounts and to provide, after publication of its 2021 annual report and accounts, explanations of how those matters had been addressed. The observations covered:
The company made satisfactory improvements to disclosures in its 2021 annual report and accounts. |
| Entity | Co-operative Group Limited (3) |
| Balance Sheet Date | 4 January 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Revenue recognition for prepaid funeral plans We asked the company for information about the judgement disclosed in relation to revenue recognition for prepaid funeral plans, which was the subject of a qualified audit opinion. We questioned its basis for concluding that the proceeds from whole of life insurance policies, in which payments from customers were invested, represented variable consideration from a contract with a customer. We also asked the company to explain the basis for recognising fair value gains and losses on revaluing these insurance policies as changes to deferred revenue; that is, on the balance sheet rather than in the income statement. Following correspondence and discussions with the company, it agreed to change its treatment. Under the revised policy it recognises fair value movements on life insurance policies in the income statement, as required by IFRS 9 ‘Financial Instruments’. The company now treats the amounts initially received from customers as revenue, in accordance with IFRS 15 ‘Revenue from Contracts with Customers’. As these amounts are received in advance of the performance of the funeral, it defers the revenue and increases this liability by recognising an effective interest charge in the income statement until the plan is redeemed. In accordance with IAS 8 ‘Accounting, policies, Changes in Accounting Estimates and Errors’, the company has accounted for this change as a prior period adjustment in the next annual report and accounts, with a restatement of comparative figures. 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. Consolidation of the Reclaim Fund We asked the company for further information about the judgement it disclosed in relation to the consolidation of the Reclaim Fund. The company had been in the process of reconsidering the extent to which it had power over the Reclaim Fund, and its exposure or rights to any variable returns from its investment in the Fund. Following discussions with the company, it concluded that it had neither power over, nor exposure or rights to, variable returns from the Reclaim Fund and agreed to deconsolidate it. The company agreed to restate the comparative amounts in its next annual report to reflect this revised accounting policy and to refer to the FRC’s involvement in this decision as described above. Alternative performance measures The company’s annual report described underlying profit before tax, an APM, as giving a ‘truer’ measure of performance than reported profit. We explained that APMs should not be given more authority than their IFRS equivalents. The company has agreed to reflect this in its future annual reports. |
| Entity | Great Portland Estates plc (3) |
| Balance Sheet Date | 31 March 2020 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Income statement presentation We asked how the duplication of line items in the income statement and the offsetting of amounts of income and expense was consistent with the requirements of IAS 1, ‘Presentation of Financial Statements’. The company acknowledged that the presentation of additional lines on the face of the income statement may have made it unclear which amounts were presented in accordance with IFRS and agreed that this may have been confusing for users. The company agreed to amend its presentation of the income statement in its future reporting to remove the duplication of line items and present line items on a gross basis without offsetting. As this change affects a primary statement, the company agreed to disclose in its next report and accounts that the matter came to its attention as a result of the Financial Reporting Council’s enquiry. |
| Entity | Hilton Food Group plc (3) |
| Balance Sheet Date | 29 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Cash flow statement We questioned why the proceeds from the issue of an inter-company loan were classified as financing, rather than investing, activities in the parent company cash flow statement. The company acknowledged that it would have been more appropriate to classify this as an investing activity and agreed to restate the comparatives in its next 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 result of our enquiry. We also asked why the proceeds from the maturity of a bank treasury deposit were classified as financing, rather than investing, activities in the consolidated cash flow statement. The company explained that this classification reflected the fact that these bank deposits were directly linked to certain financing activities, and agreed to explain this in its future reporting. Joint ventures We asked the company for further information about why its joint venture facilities in Australia were not accounted for as subsidiaries due to the Group having taken full operational control following a restructuring. The company provided a satisfactory explanation, which it agreed to disclose in future. We suggested clarifying that both joint venture partners had equal representation on the joint venture board which controlled the key business and strategic decisions. We also asked the company to explain the judgements it made in determining that it was acting as an agent on behalf of the joint venture rather than as principal, in certain transactions with customers, with revenue being recognised on a net basis. The company provided a satisfactory explanation and agreed to more fully describe this in its next annual report and accounts. Leases We asked for more information about the changes to the assessment of purchase options in leases which resulted in significant additional liabilities being recognised on the initial application of IFRS 16, ‘Leases’ at 31 December 2018. The company concluded that, having reviewed this further, these lease arrangements should have been recognised as finance leases, rather than operating leases, in accordance with the requirements of IAS 17, ‘Leases’, in its 2018 accounts. The company agreed to disclose in its next report and accounts details of this error, including the adjustment required to the assets and finance lease liabilities reported in the balance sheet in its 2018 accounts. The company explained that, following the adoption of IFRS 16, the adjustments required to its 2019 accounts to adjust for this error were not material. We also asked the company to clarify the extent of future cash flows that the company is potentially exposed to arising from leases. The company provided a satisfactory explanation. Share-based payment We asked for more information about the adjustment in respect of employee share schemes included in the statement of changes in equity, as this appeared inconsistent with the charge for share options included in the employee benefit expense. The company explained that the adjustment included cash paid to satisfy share scheme awards classified as equity-settled share-based payments. The company acknowledged that these awards should have been accounted for as cash-settled share-based payments once a practice of offering a cash alternative had been established in 2018. The company explained that it had concluded that the adjustments required to correct this error were not material and that there is no longer a constructive obligation to settle awards in cash following the ending of this practice in 2020. The company agreed to explain this in its next report and accounts. |
| Entity | IWG plc (3) |
| Balance Sheet Date | 31 December 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 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. Cash flow statement We queried the company’s presentation of interest payments on lease liabilities as financing cash flows. This was inconsistent with its existing policy of classifying interest payments on financial liabilities as operating cash flows. The company agreed to follow a consistent policy for all interest payments and to restate the comparative amounts in the cash flow statement to classify interest on leases as operating cash flows. We also queried the presentation of lease incentives (contributions received from partners to enhance premises leased by the company) in the cash flow statement. It was also not apparent how the lease incentives were reflected in the movements in the right-of-use assets and lease liabilities notes to the financial statements. The company explained that the amounts received in respect of the lease incentives were netted against lease repayments recognised in the cash flow statement. The company acknowledged that IAS 7 'Statement of Cash Flows' requires gross presentation of cash flows in such cases and undertook to restate their cash flow statement accordingly. The company also agreed to disclose separately partner contributions in the related notes to the financial statements. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as result of our enquiry. Alternative Performance Measures (APMs) The management commentary in the strategic report stated that information provided on an IAS 17, ‘Leases’, basis better represented the economics of the company’s leases and referred to ‘Operating profit’ in relation to the information presented on an IAS 17 basis. IAS 17 had been superseded by IFRS 16 for the period in question and information provided in accordance with IAS 17 was, therefore, an APM. We asked that, in future, the company not give disclosures that appeared to give more authority to APMs than to their IFRS equivalents, to which the company agreed. Lease term We queried the determination of the term of the company’s leases and the specific factors considered in the assessment of extension and termination options in those leases. The company provided a satisfactory response. We explained that users of the accounts would also find the information provided to us helpful and the company agreed to provide it in future accounts. Accounting policies We queried the nature of the ‘other adjustments’ made by the company on transition from IAS 17 to IFRS 16 and the ongoing accounting policy for lease incentives. We also queried whether the lessor accounting model should be applied to the company’s contracts with customers. The company provided adequate explanations and agreed to enhance their relevant accounting policies in the future. |
| Entity | St James House plc (3) |
| Balance Sheet Date | 31 January 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2021 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | CVS Group plc (3) |
| Balance Sheet Date | 30 June 2019 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2020 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |
| Entity | Galliford Try Holdings plc (3) |
| Balance Sheet Date | 30 June 2018 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2020 |
| Auditor (5) | N/A |
| Case Summary / Press Notice | N/A |