Mitchells & Butlers

Brexit Disclosures

As the Brexit uncertainty continues, we look at how Brexit has been disclosed in a sample of FTSE 350 annual report and accounts.

As things currently stand, ‘exit day’ is still scheduled to be on 29 March 2019, although the likelihood of this date slipping appears to be increasing. The Government has issued the statutory instrument (SI 2019/145), Accounts and Reports (Amendment) (EU Exit) Regulations 2018, which effectively cuts the UK’s ties with the EEA (European Economic Area). The changes proposed will be made to the Companies Act 2006 and secondary legislation, making EEA states third countries under UK law. The Government has also issued another SI The Statutory Auditors and Third Country Auditors(Amendment) (EU Exit) Regulations 2019 dealing with statutory auditors and third country auditors. 

The Government has issued a number of additional pieces of guidance on how companies should operate in the event of a no-deal Brexit occurring on 29 March, on topics ranging from competition, insolvency and intellectual property, to the recognition of professional qualifications.

The Financial Reporting Council (FRC) and the Department for Business, Energy and Industrial Strategy (BEIS) have published letters for auditors and accountants to share information in case there is no deal for leaving the EU by Friday 29 March 2019.

It remains to be seen when these changes will actually come into force, and if further discussions with the European Union will change proposals that have been made. Needless to say our technical team will follow developments closely and ensure legislation and commentaries on the Croner-i Tax and Accounting platform are updated as soon as possible.

Mitchells & Butlers plc Monitor

Mitchells & Butlers plc Annual Report 2018
CR Monitor Issue: 
2019/0120
Company covered: 
Mitchells & Butlers plc
Period End: 
29 September, 2018
Report issued on 15 January 2019 covered the following practice issues:
Pronouncements
Extended disclosure in respect of the impacts of new accounting standards including IFRS 15 "Revenues from contracts with customers", IFRS 9 "Financial instruments", and IFRS 16 "Leases".
Change
Discussion on a new key audit matter added in the auditor’s report.
Pronouncements
Presentation of a reconciliation of movements in net debt following adoption of an amendment to IAS 7 "Statement of cash flows".
Change
New note added after acquisition of two associates.
Change
Disclosure of main risks linked to defined benefit pension scheme.
Change
Difference in number of reported weeks.

Segment disclosures and the chief operating decision maker under IFRS

This report sets out our findings in respect of a review of the IFRS segment disclosures of 25 UK listed companies, drawn from a range of different industries, as covered by IFRS 8 “Operating segments”. We consider a number of points including disclosures in respect of the chief operating decision maker, the factors used to identify reportable segments and whether there has been aggregation of operating segments and income statement and statement of financial position information reported by segment.

Mitchells & Butlers plc Monitor

Mitchells & Butlers plc Annual Report 2016
CR Monitor Issue: 
2017/0310
Company covered: 
Mitchells & Butlers plc
Period End: 
24 September, 2016
Report issued on 28 March 2017 covered the following practice issues:
Change
Identification of “onerous lease provisions” as a new risk area of possible material misstatement by the auditors.
Change
Auditors' extend discussion of materiality by including a graphical presentation.
Change
Adoption of amendment to IAS 19 in respect of accounting for service linked employee contributions.
Pronouncements
Discussion of changes to IFRS 8 and IAS 24 as a result of annual IFRS improvements included.
Change
Tabular disclosure of principal risks includes "food supply chain safety" as a new principal risk.
Restatement
Financial liabilities restated to include accrued charges without explanation.

Brexit Disclosures in Listed Company Annual reports

The referendum vote to leave the European Union (EU) has undoubtedly led to uncertainty for business and will potentially have far reaching impacts for companies from many different industries. This report, pulled together in March 2017, focuses on the information that companies have disclosed within their annual reports during the latter half of 2016. It sets out disclosures around risk as well as the disclosure of Brexit impacts which have already been felt and the resulting ramifications.

Operating Lease disclosures under IFRS

This report sets out our findings in respect of a review of the operating lease disclosures when acting as lessee of 35 companies listed on the London stock exchange. We consider a number of points including the disclosure, as currently governed under IFRS by IAS 17 “Leases”, of total future minimum lease payments focusing on the assets identified and the time periods presented; disclosure of minimum sublease payments expected to be received; disclosure of lease and sublease payments recognised in the period; and disclosure of the general terms of significant leasing arrangements including contingent rent payable basis, the existence and terms of renewal or purchase options and escalation clauses and restrictions imposed by lease arrangements such as those concerning dividends, additional debt and further leasing. 

Fair value measurement disclosures - other assets: an emerging issue under IFRS

This report surveys fair value measurement disclosures on assets other than financial instruments, investment property and bearer plants.  Our sample covers biological assets, land and buildings, non-financial assets held in defined benefit pension schemes and cash-generating units whose recoverable amount is calculated using fair value less costs to sell. We note a predominance of classification at Level 3, indicating use of unobservable inputs.

Mitchells & Butlers plc Monitor

Mitchells & Butlers plc Annual Report 2014
CR Monitor Issue: 
2015/0118
Company covered: 
Mitchells & Butlers plc
Period End: 
27 September 2014
Report issued on 27 January 2015 covered the following practice issues:
Change
Drawdown of liquidity facility included in borrowings and financing cash flows, but no asset identified in contrast to peer company.
Pronouncements
Pensions finance charge included in "underlying profit".
Change
Effects of acquisitions on results disclosed.