FRC publishes corporate reporting insights
News types: Codes and Standards Announcements
Published: 21 October 2025
The Financial Reporting Council (FRC) has today issued two thematic reviews designed to enhance the quality of, and provide insights into, UK company reporting in respect of investment companies and share-based payment arrangements.
These thematic reviews offer valuable insights into two areas of corporate reporting — share-based payments and investment company disclosures. Both themes highlight the importance of clarity and consistency in financial reporting, especially where judgement and complex valuation models are involved. From equity-settled awards to fair value measurements of unquoted investments, the reviews shed light on common pitfalls and showcase good practice, helping companies strengthen their disclosures and giving investors greater confidence in the quality of UK financial reporting.
The Share-based Payment thematic review examines how companies have applied IFRS 2 ‘Share-based Payment’, a complex standard that requires judgement and modelling to value share-based transactions, such as those used in employee compensation packages. The review highlighted varying quality in share-based payment disclosures. While many companies provided clear and concise policies and disclosures, some showed inconsistencies – such as unexplained cash outflows despite describing awards as equity-settled.
The investment companies thematic review provides insights into the reporting by investment trusts, venture capital trusts and other closed-ended investment entities. While these entities’ financial statements are generally straightforward, the FRC have identified recurring issues, particularly disclosures around Level 3 fair value measurements. The thematic review sets out key recommendations and areas for improvement, including improved disclosures around the quantification of significant unobservable inputs and assumptions, and related sensitivities, for Level 3 valuations.
These thematic reviews are designed to support high standards of corporate reporting, and in turn provide investors with confidence in the quality of UK financial reporting. They form part of the FRC’s ongoing commitment to improving the quality and transparency of UK corporate reporting.
Read the Share-Based Payments thematic review