Many UK Firms Unprepared For New EU Reporting Requirements, Deloitte Warns

by Robert Lee, Tax-News.com, Brussels

22 February 2007

A report published this week by business services firm Deloitte reveals that 86% of UK listed companies may need to produce additional reports to meet new reporting rules which came into force on January 20th.

The report - 'Clear All Year: Considering new rules and practice in interim reporting' - includes advice and guidance to assist companies in meeting the new requirements. It also surveys current reporting practices to determine the impact of the new rules.

Isobel Sharp, Audit Partner at Deloitte explained that: “These rules have come as a result of the implementation of the EU Transparency Obligations Directive which applies to all fully listed companies with periods beginning on, or after 20th January 2007."

“In the last few years, the focus has been on providing more information in existing reports which meant that the average number of pages in annual reports increased to 85 in 2006, up from 71 in the previous year. But the new rules demand not only more information, but more reports.”

Under the changes, all fully listed companies are required to issue Interim Management Statements (IMS) twice a year, in-between annual and half-yearly reporting. Deloitte’s survey shows that 86% of companies will need to increase their reporting of performance between annual and half-year announcements.

Furthermore, all IFRS half-yearly group reports must comply with IAS34 on interim financial reporting. At present only 9% of half-yearly reports claim to have adopted this standard, according to Deloitte.

Additionally, the deadlines for reports have been brought forward, which means that half-yearly reports must be issued within two calendar months of the period end, and annual reports within four months. Deloitte's survey indicates that 46% of listed companies will need to bring forward their half-yearly reporting to comply with the new two month deadline.

Isobel Sharp continued: “These new rules are a bid for greater transparency and disclosure for listed companies. But there is growing concern that this increasingly regimented reporting will be a burden on business and may simply lead to more bland statements rather than focused commentary issued as appropriate by companies."

The survey featured in the report was conducted by obtaining the half-yearly reports of 100 listed companies announcing half-year results in 2006. Similar surveys were conducted in 1995, 1999, 2002 and 2004.

Recommended