7 outubro 2025 Judy Pink - Jill Phillips Corporate Governance - ESG - Risk and governance

FRC outlines expectations for 2025/26 corporate reporting

The Financial Reporting Council's annual review of corporate reporting 2024/25 sets out findings from its monitoring of UK companies' annual report and accounts and its expectations for the coming reporting season. This report is based on reviews of 222 companies, with reviews of FTSE 350 companies making up fewer than 50% of reviews for a second year.

Main findings

  • The quality of corporate reporting across the FTSE 350 companies reviewed in 2024/25 has been maintained, with a lower proportion of reviews resulting in substantive queries compared to previous years. However, there remains a quality gap between companies in the FTSE 350 and other companies.
  • The overall number of restatements prompted by FRC reviews has fallen this year compared to the previous three years, with also a reduction in the number of restatements that affect profit.

Most common issues

  • 1: Impairment of assets: This topped the list of the FRC's most frequently raised issues for the third successive year, affecting 10% of reviews, though none of these resulted in any companies having to restate their accounts. Clearer and more detailed impairment disclosures, or better connectivity between disclosures and other areas of the financial statements, could have prevented many queries.
  • 2: Cash flow statements: This generated the second highest number of queries, with the FRC disappointed by the continuing number of cash flow restatements resulting from their reviews. The main issues identified related to classification of cash flows by companies outside the FTSE 350, an area that is being considered as part of a thematic review of reporting by UK smaller listed companies.
  • 3: Financial instruments: Accounting treatment of financial instruments remained at third place in the top ten issues, with three companies restating their accounts as a result. Issues included unrecognised obligations to repurchase own shares and misclassification of warrant instruments.
  • The FRC had fewer substantive queries in respect of climate-related reporting in 2024/25. However, compliance challenges persist. All climate-related financial disclosures required by the Companies Act 2006 must be provided in the annual report and accounts, as cross-referring to information presented outside the annual report and accounts does not comply with the statutory requirements.

Expectations for the 2025/26 reporting season

The FRC's headline expectations for the coming reporting season remain consistent with those highlighted in recent years. In particular, companies should:

  • Review the report before it is published to identify common technical compliance issues. Many questions, corrections and restatements could be avoided by reviewing against the top ten issues the FRC challenges.
  • Provide clear and consistent disclosures about judgements, uncertainty and risk that are sufficient for users to understand the positions taken in the financial statements. The FRC frequently asks companies to enhance disclosures when they fail to comply with requirements in these areas.
  • Ensure the strategic report includes a fair, balanced and comprehensive review of the company's development, position, performance and prospects.
  • Take a step back and consider whether the annual report and accounts tells a consistent and coherent story throughout the narrative reporting and financial statements. Good quality reporting should include all material and relevant information whilst remaining clear, concise and understandable.

Looking ahead

The FRC is undertaking a thematic review into reporting by UK smaller listed companies, focusing on impairment of non-financial assets, revenue recognition, financial instruments and cash flow statements. The review is ongoing and the FRC expects to publish the final report before the end of 2025.

New regulatory developments, which are summarised in Appendix 4, include the 2024 UK Corporate Governance Code applicable for periods beginning on or after 1 January 2025 (except Provision 29, which asks boards to make a declaration in relation to the effectiveness of their material internal controls, and applies to periods beginning on or after 1 January 2026). The FRC's annual review of corporate governance reporting, to be published later this year, will identify areas of good disclosures on the preparations companies are making in this area.

Read more

The FRC's annual review of corporate reporting 2024/25 can be found here.