DS Smith

Disclosure of judgements and estimates

At the end of 2017, the FRC published a thematic review which focused on the disclosure of critical judgements and sources of estimation uncertainty, a requirement of IAS 1 Presentation of Financial Statements. This review was carried out in part because, in its 2016-17 corporate reporting review, the FRC found that companies were not making sufficiently clear disclosures in this area.

Unfortunately, despite this, judgements and estimates still represent an area of difficulty for companies, remaining the area most commonly raised by the Corporate Reporting Review Panel in reviewing company accounts during 2017–18. Common issues include poor explanations, a failure to separate judgements and estimates clearly and discussion of judgements and estimates that were not considered by the company to be significant or material. In some cases the FRC noted that disclosures elsewhere in the accounts suggested that significant judgements were made but these were not included in or referred to in the IAS 1 disclosures.

As a result of this, the FRC can be expected to continue its scrutiny of these disclosures and to challenge companies that do not provide clear, specific disclosures that meet the requirements of IAS 1.

This report analyses the disclosures about judgements and estimates which have been included in the consolidated annual reports of 20 UK listed companies selected at random from the FTSE 350.

Risk and viability in the strategic report

In light of recent high-profile collapses such as Carillion, the reporting by companies of risks and long-term viability is once again in the spotlight. Investors and other stakeholders expect detailed, specific information in the annual report which clearly sets out the key risks facing the company and the potential impact of these risks on the company’s longer-term viability. This report analyses the consolidated financial statements of 20 UK listed companies to assess the quality of risk and viability reporting in the annual report.

DS Smith plc Monitor

DS Smith plc Annual Report 2017
CR Monitor Issue: 
2018/0208
Company covered: 
DS Smith plc
Period End: 
30 April, 2017
Report issued on 20 February 2018 covered the following practice issues:
Change
Disclosure of a post balance sheet business acquisition in a subsequent events note.
Pronouncements
Enhanced disclosure explaining the expected impact on adoption of IFRS 15 and IFRS 16.
Change
Enhanced tabular disclosure of principal risks.
Change
Additional disclosure in respect of non-GAAP performance measures.
Change
Audit report presentation enhanced by inclusion of diagrams illustrating audit scope and materiality.

DS Smith plc Monitor

DS Smith Plc Annual Report 2016
CR Monitor Issue: 
2016/1203
Company covered: 
DS Smith Plc
Period End: 
30 April, 2016
Report issued on 05 December 2016 covered the following practice issues:
Change
Consideration for business combination expressed on a cash, debt and pension free basis.
Change
‘Cyber risk’ identified as a new principal risk.
Pronouncements
Disclosure of expected changes in non-audit services and non-audit fees policy.
Change
Disclosure of new investment strategy for pension scheme’s assets.

DS Smith plc Interims Monitor

Interim Financial Report
CR Interim Monitor Issue: 
2014/0405
Period End: 
31 October 2013
Listing Status: 
FTSE Mid 250
ICB Industry Classification: 
2723 Containers & Packaging
Auditor: 
Deloitte
Pronouncements
Revised pension rules decrease comparative annual profit.
Pronouncements
Disclosure on fair values of financial instruments.
Divergence
Some expenses reclassified without explanation.
Change
Adjustments to fair values of acquired business disclosed for current period and since last interims.

DS Smith plc Period End 30 April 2009

Losses on investment in an associate reduce profit by 57%
UK packaging company DS Smith recognises £22.6 million losses on its investment in an associate arising from currency impacts that reduce its pre-tax profit by 57%.

DS Smith plc Period End 30 April 2008

DS Smith Annual Report 2008

Purchase of minority interests results in increase in carrying amount
Following exercise of put options by non-controlling shareholders, UK packaging company DS Smith increases its interest in a subsidiary but reports an increase in minority interests.

DS Smith plc Period End 30 April 2007

DS Smith Annual Report 2007

Put option liability adjusted against minority interests 
UK packaging company DS Smith recognises a put option held by a minority interest as a £12.3 million liability and adjusts minority interest by this amount, reducing equity by 2.2%.