The Financial Reporting Council (FRC) has published two thematic reviews designed to assist companies in improving the quality, clarity, and decision-usefulness of their corporate reporting.
Reporting on Intangible Value Drivers
The FRC examined corporate disclosures regarding intangible value drivers, recognising that contemporary business models depend heavily on assets such as technology and organizational knowledge. The assessment reviewed 10 annual reports across diverse sectors and encouraged companies to clarify how key intangibles support their strategic objectives, business models, and operational outlook.
The regulatory body also emphasized the necessity of stronger connectivity between strategic reports and financial statements, ensuring consistent information across the entire annual report.
Disclosures on Financial Instruments
Financial instruments represented the second most frequently cited topic in the FRC 2025/26 Annual Review of Corporate Reporting, given their potential to impact reported performance, financial status, and cash flow projections. Expanding upon previous thematic research focused on banking institutions, the review evaluated 20 listed corporates operating under UK-adopted IFRS Accounting Standards.
Although the FRC uncovered no material compliance issues regarding the application of IFRS 9, it identified technical disclosure enhancements under IFRS 7. Specifically, improvements were recommended for hedge accounting, expected credit losses, and debt factoring arrangements.
The FRC recommended a principles-based approach to disclosures, prompting preparers to deliver tailored, connected information while effectively applying materiality thresholds to trim redundant content.
