Of the companies surveyed, 72% are listed on the main market, and the spread of asset type reviewed includes equity and fixed interest funds, private equity, real estate, asset leasing, fund of funds and debt funds.

The survey focuses on current requirements in reporting, the changes coming into force over the next year or so and current regulatory hotspots. Deloitte says the results, together with Deloitte’s insight, “help boards to identify key regulatory challenges and opportunities to enhance their reports whilst avoiding potential pitfalls.”

As well as gathering intelligence that will be useful for boards to consider their own reporting standards, the report includes examples of best practice from local company reports.

Key insights include:

  • Companies display a high level of compliance with accounting and corporate reporting requirements. The quality of reporting continues to improve.
  • The average length of local reports is growing. However, most are still some way short of the average report length of UK listed companies.
  • More companies, particularly those in real estate, now disclose a broader set of Alternative Performances Measures (APM), however some of these fall short of the FRC guidelines. 

David Becker, Partner, Deloitte, said: “It is clear from the findings that very few, if any, companies can be considered in full compliance with the letter of the FRC guidelines on APMs. Only one in three companies explicitly identified what metrics they consider to be their KPIs and only one in four companies have identified APMs. Clearly, there are improvements to be made in this area.”

For disclosure of critical accounting judgements and estimation uncertainty, the level of documentation varies. While some companies have made efforts to tailor these disclosures there continues to be less clarity over the distinction between a critical accounting judgement and an estimation of uncertainty.

“There still appears to be a significant amount of standard or boilerplate principal risks and uncertainties disclosure in the strategic reports, with only 28% tailoring disclosures, and we anticipate this will be an area of focus by the RFC in the future,” commented Mr Becker, adding: “Overall we found that the companies surveyed displayed a high level of compliance with the extensive accounting and corporate reporting requirements. However, keeping up with changes in reporting requirements and marketplace best practice is a common challenge for preparers of annual reports, particularly as the needs of the company, regulators, investors and the wider public evolve.”

A full copy of the Annual Report Insights can be obtained by emailing davireed@deloitte.co.uk

Pictured above: David Becker