The UK Government has launched a wide-ranging review of the corporate reporting framework with the objective of creating a simpler, more proportionate and digitally enabled reporting regime. The proposals form part of the Government’s wider growth agenda and seek to reduce the administrative burden on UK businesses whilst maintaining the transparency and accountability required by investors, creditors and other stakeholders.
If you manage corporate compliance and accounts, the MCR proposals include the following consultation areas which may impact you:
The full consultation process which closes at 11:59pm on 30 November 2026. If you’ld like to share your views, click here:
https://www.gov.uk/government/consultations/modernising-corporate-reporting
The September 2024 version of FRS 102 Section 1A now places greater emphasis on information needed for ‘a true and fair view’, with several areas moving from encouraged disclosure to required or potentially necessary disclosure. The changes are required for all preparers of Section 1A financial statements for periods commencing on or after 1 January 2026.
The key disclosure changes are:
| Area | Practical impact |
| Related parties | All related party transactions generally need to be disclosed. Exemptions are available for transactions between wholly owned members of a group. |
| Revenue | Entities must disclose information such as performance obligations under the five-step approach, significant payment terms and the nature of promised goods or services. |
| Leases and right-of- use assets | Lessees must provide descriptions of significant leasing arrangements and, where necessary, extra qualitative and quantitative information, e.g low value leased assets, short term leases. |
| Tax and deferred tax | Additional current tax, deferred tax and tax reconciliation disclosures are required, including deferred tax assets and liabilities by type of timing difference. |
| Provisions and contingencies | More detailed disclosures are required for provisions, contingent liabilities and contingent assets, including reconciliations and explanations of uncertainties. |
| Share-based payments | Specified disclosures are required about arrangements in place, option movements and the effect on profit or loss and financial position. |
| Going concern | Specific going concern disclosures are now required, including confirmation that management has considered at least 12 months of future information, and disclosure of material uncertainties where relevant. |
| Accounting policies and judgements | The focus is now on material accounting policy information, together with significant judgements that have the most significant effect on amounts recognised. |
| Dividends | Dividends declared and paid or payable must be disclosed |
The changes significantly increase the minimum disclosure requirements for Section 1A, whilst maintaining the overall requirement for the financial statements to show a true and fair view on top of these minimum disclosures.
For many small entities, the much greater level of disclosure will need to be planned for as part of their transition exercise to ensure the relevant information is available to meet the disclosure requirements.
Our assurance and reporting experts are on hand to support you navigate corporate reporting changes and the impact on your businesses.
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