Go-Ahead

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.

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.

Go-Ahead Group plc Monitor

Go-Ahead Group plc Annual Report 2018
CR Monitor Issue: 
2019/0116
Company covered: 
Go-Ahead Group plc
Period End: 
30 June, 2018
Report issued on 29 January 2019 covered the following practice issues:
Pronouncements
Extended disclosure in respect of the expected impact of IFRS 9 "Financial instruments".
Change
Extended disclosure in respect of reporting segments
Change
Recognition of a defined benefit pension gain following an inflation index change.
Change
Recognition of goodwill and tangible asset impairments.
Pronouncements
Adoption of a multi-column income statement format highlighting exceptional items.
Change
Extended disclosure in relation to key sources of estimation linked to contract and franchise accounting.

Go-Ahead Group plc Monitor

Go-Ahead Group plc Annual Report 2017
CR Monitor Issue: 
2018/0111
Company covered: 
Go-Ahead Group plc
Period End: 
1 July, 2017
Report issued on 23 January 2018 covered the following practice issues:
Change
Change in accounting policy in respect of franchise adjustments in relation to the rail pension scheme.
Change
Presentation of auditors' report enhanced by inclusion of a summary of the audit approach and a diagram illustrating the application of materiality.
Change
Identification of new key audit matter linked to rail franchise.
Pronouncements
Summarised non-quantitative disclosure of the expected future impacts of new accounting standards on revenue, leases and financial instruments.

The Go-Ahead Group plc Monitor

The Go-Ahead Group plc Annual Report 2016
CR Monitor Issue: 
2017/0514
Company covered: 
The Go-Ahead Group plc
Period End: 
2 July, 2016
Report issued on 30 May 2017 covered the following practice issues:
Change
Basis of calculation of adjusted earnings per share altered to exclude incremental impact of IAS 19.
Change
No explanation for a reporting period of 53 weeks instead of 52 weeks.
Change
Risk disclosures enhanced by introduction of "risk heat map".
Change
Disclosure of reconciliation of movements in deferred tax balances.
Pronouncements
Disclosure of unquantified impact of impending new leasing and revenue standards.

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.

Other Comprehensive Income: Presentation of items by reclassification status an emerging issue under IFRS

This report considers the presentation of other comprehensive income following the issue of amendments to IAS 1 “Presentation of financial statements”. It considers how the various line items that represent other comprehensive income are reported by nature focusing on the presentational split between those items that will not be reclassified subsequently to profit or loss and those that will be reclassified to profit or loss when specific conditions are met.