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The Art of Dispute: Key case law and recent developments in dispute resolution
Our newsletter provides practical advice and a concise analysis of key case law and recent developments in dispute resolution.
Global | Publication | December 2023
On 7 December 2023, the Financial Reporting Council’s Lab (FRC Lab) published a report on structured digital reporting, setting out some areas of focus for companies and suggestions to optimise reporting to meet the needs of investors and other users.
Companies admitted to trading on UK regulated markets are required to produce their annual financial report in a structured digital format (iXBRL) under rules in DTR 4.1 and in accordance with guidance in Primary Market Technical Note 507.1 which replaced the UK version of the EU Transparency Directive's regulatory technical standard for the European Single Electronic Format.
As well as reviewing recent reports filed to the FCA’s National Storage Mechanism, investment professionals were asked about their use of structured digital reports in practice and, as a result, the report includes best practice tips in several areas, including the following:
Tagging
As in previous years (see the FRC Lab’s 2021 report and 2022 report for further explanation), the FRC Lab recommends companies make sure that:
Design and usability
The FRC Lab comments that the human-readable layer of most reports continues to be produced by converting PDFs to XHTML and it suggests companies may want to consider using a ‘native XHTML’ approach instead, to achieve a more accessible and responsive design (see Embracing XHTML as a web-based format in the Lab’s 2022 report). The report also comments on means of ensuring the usability of text-block tags.
Process
Companies are reminded that they are responsible for the quality of the report even when the tagging process is outsourced, so the report sets out a number of suggestions for companies, including that they may want to improve their understanding of the tagging requirements to enable appropriate review of the work of any service providers more effectively. Companies should also ensure technical accounting staff who have familiarised themselves with the taxonomy are involved in the tag selection.
Growing investor use
The report comments on the increased use of digital structured reports by investors. It notes that over a third of investors surveyed are now using XBRL-tagged reports as a source of company financial data alongside other more traditional data sources such as data aggregators or PDFs from company websites.
Among those who used XBRL data, 77% retrieved it from company websites, rather than repositories such as the National Storage Mechanism. As a result, the FRC Lab encourages companies to provide on their website an FCA-validated version of their structured report with an Inline XBRL viewer, in addition to the zip file.
(FRC, Structured digital reporting – 2023 insights, 07.12.2023)
On 6 December 2023, the Financial Reporting Council (FRC) announced its areas of supervisory focus for 2024/25, including priority sectors, for corporate reporting reviews and audit quality inspections.
Priority sectors
The priority sectors for selection of company accounts and audits are:
The FRC notes that the financial services sector, including banking and insurance, continues to be a focus of reviews and is included annually in the selections made.
Areas of focus
The FRC’s programme of corporate reporting reviews and audit quality inspections will pay particular attention to the following areas:
(FRC, FRC announces areas of supervisory focus for 2024/25, 06.12.2023)
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