Newswire April 2020

FRC and professional body coronavirus updates

The FRC has created a page that links to a number of its COVID-19 responses. These include:

• Guidance for companies and auditors during Covid-19 crisis
• Information on AGMs and the impact of COVID-19
• Information on modifications to auditor’s opinions and reports

Professional bodies such as the ICAEW, ICAS and ACCA also have hubs on their respective websites containing resources relating to COVID-19 issues.  Mercia Members also have free access to Mercia’s COVID-19 Resource Package.  A wide range of articles, including guidance for specialist sector entities can also be found on our blog.

Company accounts filing temporary reliefs

Further to Companies House temporarily pausing the strike off process, providing the ability to apply for an automatic and immediate 3-month accounts filing extension and noting that late filing penalty appeals due to COVID-19 will be “treated sympathetically”, the FCA has also extended its normal deadline for publishing fully listed company accounts from four months to six, and AIM is allowing its members nine months instead of their usual six, subject to application. 

Proposed changes to leasing standard

The IASB is proposing changes to IFRS 16, its new leasing standard, to respond to changes in rent structures related to COVID-19.  Usually lessees and lessors would need to assess whether changes like these constituted lease modifications that would need special accounting treatment, but the IASB acknowledges that this could be considerable work and is planning to offer a practical expedient to lessees so that they would not need to assess COVID-19-related rent relaxations as modifications to leases, but instead as a "negative variable lease payment" meaning that any impact would be recognised in the period in which it occurs. The Exposure Draft will have a short 14-day comment period to allow the changes to be effective as soon as possible. 

Updated auditor reporting bulletins

The FRC has issued three new auditor reporting bulletins:

• Bulletin: Illustrative Statutory Auditors Reports on United Kingdom private sector financial statements
• Bulletin: Auditor’s Reports on Revised Accounts
• Bulletin: Miscellaneous Companies Act Reports 
 
The first of these Bulletins is the one most commonly used in practice and has been updated to include example auditor’s reports under revised auditing standards effective for audits of financial statements with periods commencing on or after 15 December 2019.  

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