Impairments

Paddy Power Betfair plc Monitor

Paddy Power Betfair plc Annual Report 2018
CR Monitor Issue: 
2019/0613
Company covered: 
Paddy Power Betfair plc
Period End: 
31 December, 2018
Report issued on 14 June 2019 covered the following practice issues:
Pronouncements
Adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers from 1 January 2018.
Pronouncements
Expected impact of adopting IFRS 16 Leases from 1 January 2019 is quantified.
Change
Disclosure of the merger of a newly acquired and existing business.
Change
£26.5 million impairment recognised against goodwill within the US business.
Change
Gain recognised on disposal of a non-controlling interest.
Change
Disclosure of events after the balance sheet date, including an acquisition for consideration of £101 million.

Just Eat plc Monitor

Just Eat Plc Annual Report 2018
CR Monitor Issue: 
2019/0610
Company covered: 
Just Eat plc
Period End: 
31 December 2018
Report issued on 10 June 2019 covered the following practice issues:
Restatement
Changes in the income statement presentation of the share of results of associates results in a restatement of comparative figures.
Restatement
The segmental reporting structure has been revised.
Pronouncements
Adoption of IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments from 1 January 2018.
Pronouncements
Disclosure on the expected future impact of IFRIC 23 Uncertainty over Income Tax Treatments and IFRS 16 Leases.
Change
Change in cash-generating units results in the reallocation of goodwill.
Change
Detailed discussion on two new businesses acquired.

Bakkavor Group plc Monitor

Bakkavor Group plc Annual Report 2018
CR Monitor Issue: 
2019/0609
Company covered: 
Bakkavor Group plc
Period End: 
31 December, 2018
Report issued on 10 June 2019 covered the following practice issues:
Pronouncements
Additional disclosure as to the expected future impacts of adopting IFRS 15 Revenue from Contracts with Customers, IFRS 9 Financial Instruments, and IFRS 16 Leases.
Change
The equalisation of Guaranteed Minimum Pensions for men and women results in the recognition of a past service cost.
Change
A new section is added to the audit report covering the detection of irregularities including fraud.
Change
A property, plant and equipment impairment charge is recognised.
Change
A loss on disposal is recognised on the sale of a subsidiary.
Change
A bargain purchase gain is recognised on the acquisition of a subsidiary.

William Hill Plc Monitor

William Hill Plc Annual Report 2019
CR Monitor Issue: 
2019/0516
Company covered: 
William Hill Plc
Period End: 
1 January, 2019
Report issued on 27 May 2019 covered the following practice issues:
Restatement
Service provider revenue which was previously recognised as other operating income is now classified as revenue.
Pronouncements
Disclosure of expected future impact of IFRS 16 Leases.
Change
Inclusion of a reconciliation presenting the movement in liabilities arising from financing activities.
Change
Significant impairment charge recognised during the year.
Change
Disclosure on the recent High Court ruling on equal guaranteed minimum pensions and recognition of a past service cost.
Change
Inclusion of a new key audit matter in the Auditors’ Report.

Peugeot S.A. Monitor

Peugeot S.A. Annual Report 2018
CR Monitor Issue: 
2019/0515
Company covered: 
Peugeot S.A.
Period End: 
31 December, 2018
Report issued on 20 May 2019 covered the following practice issues:
Restatement
IAS 29 Financial Reporting in Hyperinflationary Economies is applied to operations in Argentina.
Pronouncements
IFRS 9 Financial instruments is adopted with effect from 1 January 2018 on a prospective basis.
Pronouncements
IFRS 15 Revenue from contracts with customers is adopted with effect from 1 January 2018 on a full retrospective basis.
Pronouncements
Disclosures are included in respect of the expected future impact of IFRS 16 Leases which will be adopted from 1 January 2019.
Change
A change in the estimated useful lives of property plant and equipment is recognised.
Change
Material impairments recognised are explained.

Sodexo SA Monitor

Sodexo SA Annual Report 2018
CR Monitor Issue: 
2019/0413
Company covered: 
Sodexo SA
Period End: 
31 August, 2018
Report issued on 16 April 2019 covered the following practice issues:
Restatement
Change in presentation of income statement due to new ‘underlying operating profit’ measure.
Pronouncements
Additional disclosure on the impact of new accounting standards including IFRS 9 Financial Instruments, IFRS 15 Revenue from contracts with customers and IFRS 16 Leases.
Change
Additional disclosures made in respect of a business acquired during the year.
Change
Additional disclosure on changes in shareholders ownership as required by the company’s by-laws.
Change
Consumer expectation is disclosed as a new risk in the risk management report.
Change
More details on the calculation of discount rates used in impairment testing have been provided.

McCarthy & Stone Plc Monitor

McCarthy & Stone Plc Annual Report 2018
CR Monitor Issue: 
2019/0411
Company covered: 
McCarthy & Stone Plc
Period End: 
31 August, 2018
Report issued on 16 April 2019 covered the following practice issues:
Restatement
Prior year comparative cash flow statement restated following an enquiry by the Financial Reporting Council (FRC).
Pronouncements
Added disclosure as to the expected future impact of adopting IFRS 9 Financial Instruments
Pronouncements
Added disclosure as to the expected future impact of adopting IFRS 15 "Revenue from contracts with customers"
Change
Extended disclosure in respect of alternative performance measures.
Change
Disclosure of a sensitivity analysis in relation to the assumptions applied when assessing goodwill for impairment.

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.

Associated British Foods Plc Monitor

Associated British Foods Plc Annual Report 2018
CR Monitor Issue: 
2019/0315
Company covered: 
Associated British Foods Plc
Period End: 
15 September, 2018
Report issued on 19 March 2019 covered the following practice issues:
Pronouncements
New disclosure in respect of the impact of new accounting standards including IFRS 9 "Financial instruments", IFRS 15 "Revenue from contracts with customers” and IFRS 16 “leases”.
Change
Disclosure in respect of business acquisition made during the year.
Change
Disclosure of the sensitivity analysis performed during the year.
Change
Disclosure regarding contingencies related to the Guaranteed Minimum Pension.
Change
Disclosure of tax implications of European Commission state aid investigation.

Debenhams Plc Monitor

Debenhams Plc Annual Report 2018
CR Monitor Issue: 
2019/0301
Company covered: 
Debenhams Plc
Period End: 
1 September, 2018
Report issued on 5 March 2019 covered the following practice issues:
Pronouncements
Additional disclosure in respect of the impact of new accounting standards including IFRS 9 “Financial instruments”, IFRS 15 “Revenue from contracts with customers” and IFRS 16 “leases”.
Restatement
Restatement of comparatives in order to recognise stock-in-transit.
Change
Inclusion of discussion on going concern assumption and preparation of forecasts.
Change
Detailed discussion on the new key audit matter added in the auditor’s report.
Change
Additional disclosure regarding investment in associates.
Change
Recognition of significant impairment.