FRC targets smaller listed companies with practical reporting fixes
The UK’s Financial Reporting Council (FRC) has released a thematic review offering practical insights for smaller listed companies seeking to strengthen their corporate reporting. The review looks at 20 annual reports from companies outside the FTSE 350, across both the Main Market and AIM.
The FRC focuses on four pressure points that repeatedly cause problems. These include revenue recognition policies that genuinely describe how the business earns money, cash flow statements that classify items consistently, impairment disclosures that explain assumptions and sensitivities, and financial instrument disclosures that reflect the real risks on the table. From our point of view, these are precisely the areas where weak narrative structure makes high-quality digital tagging more challenging than it needs to be.
To make the findings more useful, the review includes hypothetical examples that contrast strong disclosures with ones that tend to attract regulatory questions. This gives preparers and auditors a practical reference point and provides audit committees and investors with a clearer basis for challenge. It answers the question many companies quietly ask: what does “good” actually look like?
Why does this matter for digital reporting? Because sharper, more specific disclosures translate directly into more consistent XBRL tagging, fewer ambiguities and cleaner data for analysis. Better input leads to better output, especially as Inline XBRL and data-driven supervision become the norm. Not only that, but this year the FRC is building in reviews of corporate Inline XBRL disclosures as part of their risk-based CRR assessments of selected annual reports. Companies are starting to receive letters with questions and suggestions not just about their accounting judgements and compliance but about the way their reports are tagged.
You can read the full findings in the FRC’s Thematic review here
