Tate & Lyle

Adoption of IFRS 9 Financial Instruments

IFRS 9 Financial Instruments (IFRS 9) has replaced the existing international financial instrument standard IAS 39 Financial Instruments: Recognition and Measurement (IAS 39), for periods beginning on or after 1 January 2018.

This report looks at a selection of December 2018 - March 2019 year ends where full year disclosures in relation to the actual adoption of IFRS 9 are being made for the first time. This report covers both the impact of the adoption of IFRS 9 and what disclosures have been made in relation to the adoption.

Tate & Lyle Plc Interim Monitor

Interim Financial Report
CR Interim Monitor Issue: 
2019/0419
Period End: 
30 June 2018
Listing Status: 
FTSE Mid 250
ICB Industry Classification: 
3577 Food Products
Auditor: 
Ernst & Young
Restatement
The year-end balance sheet has been restated, predominantly as a result of changes introduced in reportable segment and on inclusion of net retirement benefit interest expense and the associated tax in its alternative performance measures.
Pronouncements
Adopted IFRS 9 Financial Instruments and IFRS 15 Revenue from contracts with customers from 1 April 2018.
Pronouncements
Disclosures included in respect of the future impact of IFRS 16 Leases effective for accounting periods starting on or after 1 January 2019.

Intangible assets - disclosure of impairments

Businesses are currently facing a number of challenges, such as uncertainty surrounding Brexit and a sluggish economy. The retail sector in particular is experiencing a higher level of impairments (and, for some, going concern issues) as they contend with slow sales, high business rates and plenty of competition. Tougher economic conditions generally lead to increased risks of impairment, particularly for intangible assets such as goodwill. 

In the technical findings from the Financial Reporting Committee’s 2017/18 Corporate Reporting Review, published in October 2018 (FRC technical findings 2018), impairment was one area highlighted where additional information was often requested and disclosures did not always contain all the required information.

When writing this report the latest 2017 and 2018 financial statements of 20 UK listed companies were selected at random for review of the impairment-related disclosures, focussing on intangible assets. It was ensured that a variety of industries such as retail, IT services and tourism and leisure were included.

UK Corporate Governance Code

Corporate governance has faced immense scrutiny recently following the high-profile collapses of BHS in 2016 and Carillion in January 2018, with MPs, the media and the public blaming the actions of the directors and auditors and all asking the same question… where was the board?

MPs, shareholders and the public have also been asking how effective the Financial Reporting Council’s (FRC) Corporate Governance Code has been in deterring poor corporate governance at the UK’s largest companies, following a raft of corporate failures. In July 2018 the FRC released a new UK Corporate Governance Code, (the Code) for listed companies in the UK. It also issued an update on its Guidance on Board Effectiveness. The Code is applicable to all companies with a premium listing, whether incorporated in the UK or elsewhere.

The new Code applies to accounting periods beginning on or after 1 January 2019, so with that in mind, this Common Practices report looks at how companies have been reporting on the current Code. We look at some good examples of reporting and look at the “explanations” made regarding compliance with the Code. We also discuss what’s new in the 2018 Code to enable readers to prepare for the upcoming changes.

The annual reports of 25 UK listed companies with year-ends between 31 December 2017 and 30 September 2018 were selected at random for review, across a range of industries. The full list of sample companies detailing company name, period end, auditor and industry classification can be found at the end of this report.

Segment Reporting

The requirement to disclose information on operating segments has been around for a number of years, firstly under IAS 14 Segment Reporting, and currently under IFRS 8 Operating Segments which has been applicable for entities with publicly traded debt or equity instruments (or those which are about to publicly trade) since 2009.
 
This report looks at the operating segment disclosures in the consolidated financial statements of 20 UK listed companies selected at random.
 

Tate & Lyle PLC Monitor

Tate & Lyle PLC Annual Report 2017-18
CR Monitor Issue: 
2018/0903
Company covered: 
Tate & Lyle PLC
Period End: 
31 March, 2018
Report issued on 3 September 2018 covered the following practice issues:
Change
Discussion of key audit matters included in audit report.
Pronouncements
Extended disclosure in respect of the impacts of new accounting standards: IFRS 9 "Financial instruments", IFRS 16 "Leases" and IFRIC 23 “Uncertainty over income tax treatments”.
Change
Change in reporting segments reflects economic characteristics and the management structure of the business.
Change
Change in allocation of goodwill to cash generating units for impairment test purposes.
Change
Recognition of exceptional tax credit linked to change in US tax laws.
Change
Disclosure of post balance sheet business acquisition agreement.

Tate & Lyle PLC Monitor

Tate & Lyle PLC Annual Report 2017
CR Monitor Issue: 
2018/0305
Company covered: 
Tate & Lyle PLC
Period End: 
31 March, 2017
Report issued on 13 March 2018 covered the following practice issues:
Change
Exceptional impairment charge recognised in respect of business disposal.
Restatement
Finalisation of business combination asset values results in recognition of additional goodwill.
Change
Recognition of pension settlement gain.
Change
Deferred tax credit recognised in respect of tax losses.
Change
Goodwill impairment linked to lower growth expectations.
Pronouncements
Extended disclosure in respect of the future impacts of new accounting standards.

Tate & Lyle PLC Monitor

Tate & Lyle PLC Annual Report 2016
CR Monitor Issue: 
2017/03008
Company covered: 
Tate & Lyle PLC
Period End: 
31 March, 2016
Report issued on 21 March 2017 covered the following practice issues:
New
Control of previous joint venture achieved through stepped acquisition.
Restatement
Segment information restated to show joint ventures and associates on an equity accounting basis.
Change
Change in impairment valuation technique from value-in-use to fair value less cost of disposal for goodwill acquired last year.
Change
Table introduced showing cash flow impacts from individual exceptional items.
Change
Narrative description of key factors impacting the sustainability of its effective tax rate presented.
Change
Additional disclosures on accounting estimates and judgement relating to inventories and taxation presented.