Rolls-Royce

Rolls-Royce Holdings plc Monitor

Rolls-Royce Holdings plc Annual Report 2017
CR Monitor Issue: 
2018/0715
Company covered: 
Rolls-Royce Holdings plc
Period End: 
31 December, 2017
Report issued on 17 July 2018 covered the following practice issues:
Pronouncements
Enhanced disclosure with respect to new accounting standards including quantification in respect of IFRS 15 "Revenues from contracts with customers".
Change
Disclosure of a reduction in the number of reporting segments linked to business simplification.
Change
Enhanced disclosure in respect of capitalisation of internally generated development costs.
Restatement
Restatement of comparative lease amount linked to correction in exchange rate applied.
Change
Bargain purchase gain recognised in respect of step acquisition.
Change
Additional deferred tax asset recognised following a change in UK tax law.

New standard disclosure - IFRS 15

IFRS 15 Revenue from Contracts with Customers (IFRS 15) is one of two major new standards being applied from financial periods beginning on or after 1 January 2018 (the other being IFRS 9 Financial Instruments). In the years leading up to this, there has been an increased focus by the Financial Reporting Council (FRC) on the disclosures setting out the impact of forthcoming accounting standards in the financial statements, as required by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (IAS 8).

The FRC commented on these disclosures in its Annual Review of Corporate Reporting for the 2016-17 year-ends (annual review), and noted in its year-end advice letter to audit committee chairs and finance directors (FRC advice letter) (attached as an appendix to the report), that it expected to see a ‘step change’ in the quality of the disclosures assessing the impact of new accounting standards in the 2017-18 financial statements.

This report analyses the disclosures assessing the impact of IFRS 15 which have been included in the consolidated financial statements of 20 UK listed companies selected at random with a focus on industries where IFRS 15 has most impact.

Fair value measurement information under IFRS

IFRS 13 “Fair value measurement” sets out a single consistent framework for measuring fair value within IFRS financial statements and outlines a standardised set of disclosures in respect of fair value measurements. IFRS 13 has been mandatory now for some years, with application being required for annual reporting periods beginning on or after 1 January 2013. This report sets out the results of how requirements of the standard have been put into practice, both in terms of measurement and disclosure, in the consolidated financial statements of 139 large public limited companies with year ends between 31 March 2016 and 1 April 2017. It is not an exhaustive study of all aspects of IFRS 13 application and its conclusions are limited to our findings in respect of the areas analysed within the financial statements reviewed.

Disclosure of the impacts of IFRS 16 "Leases"

IFRS 16 “Leases” will fundamentally change accounting by lessees as it requires assets previously off balance sheet under operating lease arrangements to be brought on balance sheet as is currently the case for finance leased assets. As a result on application companies will recognise both additional assets and additional liabilities. Consequently there will also be knock on effects in the income statement as operating lease charges are replaced by a depreciation charge and a finance expense. This report analyses the financial statements of a range of companies to firstly establish whether there has been any early adoption and secondly to establish what companies are disclosing in respect of IFRS 16 and its future impacts.

Rolls-Royce Holdings plc Monitor

Rolls-Royce Holdings plc Annual Report 2015
CR Monitor Issue: 
2016/0704
Company covered: 
Rolls-Royce Holdings plc
Period End: 
31 December, 2015
Report issued on 29 July 2016 covered the following practice issues:
Change
Summarised asset and liability information presented in respect of joint ventures.
New
Presentation of viability statement looking forward five years.
Restatement
Restatement of segmental information following disposal of energy business.
Change
Research and development and other costs disclosed by segment.
New
Goodwill impaired due to poor market conditions caused by a low crude oil price and a low order intake.
New
Impairment of aftermarket rights intangible reversed.

FRS 101 "Reduced disclosure framework"- A review of application in parent company accounts of IFRS groups

The preparation of parent company financial statements is something that all consolidated IFRS groups have to consider. In light of the great level of recent change in this area in the UK this represents a one-off report giving guidance on the preparation of parent company financial statements under FRS 101 "Reduced Disclosure Framework". It focuses on UK groups that prepare IFRS consolidated accounts.

The report sets out the key findings from our review of the first-time application of FRS 101 “Reduced Disclosure Framework” by a group of 29 parent companies that prepare consolidated financial statements under IFRS.  We consider a number of points including: how companies informed shareholders of the intention to implement FRS 101; the format of the primary financial statements; disclosure of the list of exemptions taken; the concept of equivalent disclosure in the consolidated financial statements; the length of company financial statements under FRS 101; and changes in accounting policy on adoption. 

Rolls-Royce Holdings plc Monitor

Rolls-Royce Holdings plc Annual Report 2013
CR Monitor Issue: 
2014/0612
Company covered: 
Rolls-Royce Holdings plc
Period End: 
31 December 2013
Report issued on 17 June 2014 covered the following practice issues:
Pronouncements
Pension liability decreases by 18.3% on immediate recognition of past service credits.
Pronouncements
Pension longevity swap valued on external market basis.
Change
Audit findings disclosed, as extended format adopted for auditor's report.
Change
Consolidation of former joint venture leads to recognition of non-controlling interest and put option liability.
Restatement
Capitalisation policy for risk and revenue sharing income changes to match related costs.
Change
7% of cash and cash equivalents disclosed as unavailable for general use.