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.’
Cases
CRR Case Summaries and Entity-specific Press Notices (Excel version)
| Entity | Headlam Group plc (3) |
|---|---|
| Balance Sheet Date | 31 December 2024 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2026 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Impairment testing of cash generating units (CGUs) and investments in subsidiaries We asked the company to explain its approach to testing CGUs and investments for impairment, including assumptions relating to growth rates. The company provided a satisfactory response and agreed to improve disclosures relating to growth rate assumptions in the estimation of the value in use of the Melrose CGU. Presentation of cash and cash equivalents net of overdrafts We sought clarification of the basis on which the consolidated accounts presented a cash and cash equivalents balance which appeared to result from offsetting cash and overdraft positions in a cash pooling arrangement. The company explained this represented the balance on a single bank account in which multiple group companies participate with joint and several liability, rather than a pooling arrangement, and agreed to correct its disclosures regarding this arrangement. In the light of this explanation, we questioned why the parent company accounts recognised a larger cash and cash equivalents balance than the group accounts. The company agreed to restate the parent company amount to reflect the balance on the single bank account, with a corresponding adjustment to intercompany receivables, and to update its accounting policy disclosures to explain how it accounts for a single bank account in which multiple group companies participate. As the restatement affected a primary financial statement of the parent company, we asked the company to disclose the fact that the matter had come to its attention as a result of our enquiry. |
| Entity | Headlam Group plc |
| Balance Sheet Date | 30 June 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2022 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Interim cash flow statement We asked the company to clarify the operating cash flow adjustments arising from the sale of a subsidiary and, in particular, the treatment of the loss on disposal of the subsidiary. The company explained that the loss on disposal was added back to operating cash flows through its inclusion in the changes in trade and other payables line of the cash flow statement. The company agreed to present the loss on the sale of the subsidiary as a separate line item in the cash flow statement, along with improved accompanying disclosure, in its next annual report and accounts. |