Brexit corporate update

The Financial Reporting Council (FRC) and Department for Business, Energy and Industrial Strategy (BEIS) have published joint letters for auditors and accountants with information in relation to auditing and accounting and corporate reporting standards during the transition period following the UK’s exit from the EU.

In relation to accounting and reporting, the letter confirms that there is no change to the UK’s accounting and corporate reporting framework during the transition period. For financial years which begin during the transition period, UK listed companies will continue to use EU-adopted IAS. For financial years beginning after 31 December 2020, UK incorporated companies and groups that currently use EU-adopted international accounting standards will instead be required to prepare accounts using UK-adopted international accounting standards. The letter also discusses issues for groups with entities in the UK and EEA to consider in the context of reporting requirements during and after the end of the transition period.

In relation to audit, the letter confirms that there is no change for UK and EEA auditors and their clients during the transition period. In particular, the EU Audit Regulation will continue to apply in the UK. After the end of the transition period, the EU Audit Regulation will continue to apply, subject to certain amendments, as domestic, retained EU Law.