Welcome to the first Corporate Reporting Spotlight newsletter for 2026.
In this edition, we introduce our IFRS 18 series, beginning with the classification of income and expenses. We then cover the final UK SRS Reporting Standards published by the UK Government, key takeaways from the IASB’s Recent Illustrative Examples, and frequently asked questions on transition to amended Section 23 (Revenue from contracts with customers) of the new FRS 102.
We hope this newsletter helps you stay up to date on the latest developments within the corporate reporting landscape.
IFRS 18 Series – Part 1: Classification of income and expenses
This series of articles explores the key changes introduced by IFRS 18 Presentation and Disclosure in Financial Statements.
In this issue, we focus on the mandatory classification of income and expenses into defined categories in the statement of profit or loss as well as areas of additional complexity in applying the classification rules.
With retrospective application required from 1 January 2027, 2026 will be a critical year for entities to assess the impact of IFRS 18, apply judgment where needed, and prepare systems and processes for a smooth transition.
Final UK Sustainability Reporting Standards (UK SRS)
The UK government has published the final UK Sustainability Reporting Standards (UK SRS). The UK standards remain closely aligned to the international standards, IFRS S1 and S2. In our analysis we focus on the notable differences that entities will need to understand. We also cover key elements of the proposals of FCA consultation on transitioning to UK SRS from TCFD for listed issuers.
Navigating Uncertainty: Key takeaways from the IASB’s Recent Illustrative Examples
The IASB recently issued new illustrative examples on how an entity applies the requirements in IFRS Accounting Standards to disclose uncertainties in financial statements. While focused on climate-related scenarios, the insights apply to all forms of uncertainty, showing how existing IFRS accounting standards can ensure connectivity of the whole annual report and facilitate decision making.
We have prepared practical tips on materiality, key assumptions disclosure, and disaggregation to strengthen your reporting and align financial statements with the narrative in the annual report.
New FRS 102: Frequently asked questions on transition to amended Section 23 Revenue from Contracts with Customers
Starting 1 January 2026, businesses reporting under FRS 102 will experience a permanent transformation in revenue recognition practices. The key starting point is the application of transition provisions, including certain practical expedients. Entities can opt for either a modified or full retrospective approach for initial application, with the transition date set for accounting periods beginning on or after 1 January 2026, unless early adoption is chosen.
This article is part of a series of “Frequently Asked Questions” articles that explore various aspects of lease and revenue accounting under the amended FRS 102.
Did you know: Accounting for compensation received from suppliers
Suppliers may compensate customers for reasons such as late delivery or reimbursement of losses. The accounting treatment depends on the substance of the arrangement. Where compensation arises under a contract for the purchase of an asset, it will, in most cases, be treated as a reduction in the purchase price under IAS 16.16(a).
This is particularly so where the amount is calculated as a percentage of the contract price or based on a fixed daily or weekly rate for delay. In these circumstances, the payment is viewed as a pricing adjustment and reduces the cost of the asset rather than being recognised in profit or loss.In certain situations, the payment may represent reimbursement of specific incremental costs incurred as a result of the delay, such as penalties payable to third parties. Where the contract requires reimbursement of clearly identifiable, directly attributable costs and the payment is due regardless of whether the asset is ultimately delivered, the reimbursement may be accounted for under IAS 37.
In such cases, the reimbursement asset is recognised on the balance sheet when it is virtually certain to be received. In profit or loss, the credit entry may either be offset against the related expense or presented separately as other income.
Quick highlightsOverview of the financial and narrative reporting landscape
Our Technical Services team host quarterly financial reporting webinars to bring you the latest on topics such as narrative reporting, IFRS disclosures, UK and international GAAP updates, year-end reminders and recent FRC publications.
