The UK Financial Reporting Council (FRC) has decided to put its Guidance on the Strategic Report amendments on hold until the UK government intends to publish legislative changes in March 2018, raising the expectation for further changes to be made.
The government announced that it would be introducing changes regarding the reporting on section 172 of the Companies Act 2006, which the FRC aims to improve the effectiveness of. The FRC stated that it is likely these changes will result in an amendment to the existing strategic report requirements and further amendments to the guidance.
The FRC’s original consultation, released in August and open until 24 October, was to make amendments in light of non-financial reporting regulations that came into effect for the reporting period beginning 1 January 2017. This incorporated requirements of the Non-Financial Reporting Regulations into an updated version of the guidance in order to fully understand a company’s development, performance and position, as well as the impact of its activity. Following the feedback from preparers, who sought clarification on the changes and assistance in implementing them, the FRC has also prepared a set of frequently asked questions.
The document has implemented the EU Directive regarding disclosure of non-financial and diversity information, and it stated the non-financial information statement must contain a brief description of the company’s business model, environmental data, employees, social matters, human rights as well as anti-corruption and anti-bribery issues.
The FRC intends to finalise the guidance after March 2018.