How companies incorporated in the UK, or where the parent company is incorporated in the UK, can comply with UK accounting and reporting requirements.
Changes to the UK’s corporate reporting regime
There have been changes to the UK’s corporate reporting regime which affect a small number of companies.
Preparing annual accounts
All companies need to use UK-adopted international accounting standards (IAS) instead of EU adopted IAS for financial years beginning on or after the 1 January 2021. Both sets of standards were the same on 1 January 2021.
You can continue to use EU adopted IAS when preparing your accounts for financial years beginning before 1 January 2021.
Some types of companies need to take further action.
UK incorporated parent companies
UK incorporated parent companies with a subsidiary in the European Economic Area (EEA) need to check the reporting requirements in the country where the subsidiary is based.
UK companies with a presence in the EEA
UK companies with a presence in an EEA country – for example, a branch – need to check the reporting requirements in that country.
UK public companies with a UK listing
The way companies raise capital and trade securities on a regulated market has changed.
UK incorporated groups with securities admitted to trading on a UK regulated market need to prepare accounts using UK-adopted international accounting standards for all financial years beginning on or after 1 January 2021.
They can use EU-adopted IAS for accounting periods starting before January 2021. They do not need to restate these accounts after that date.
UK public companies with an EEA listing
If you list on an EEA regulated market you need to check the reporting requirements in the relevant jurisdiction. For instance, you may need to state that your accounts comply with both UK-adopted international accounting standards and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) for financial years that begin on or after 1 January 2021.
All UK public interest entities (banks, building societies, insurers and issuers of securities that trade on UK regulated markets) have to follow:
- disclosure and transparency rules issued by the Financial Conduct Authority (FCA)
- rules issued by the Prudential Regulation Authority (PRA)
Changes to the Audit Directive
UK issuers of shares or debt securities that are only admitted to trading on EEA regulated markets are no longer subject to this framework.
The Audit Directive requirement still applies to companies with a parent company incorporated in the UK.
For subsidiaries that are issuers of securities on UK regulated markets, the parent company may be subject either to the FCA or the PRA rules.
For subsidiaries that are banks or insurers and qualify under the more limited exemption provided by the PRA, the parent must be subject to the PRA rules.
UK companies need to appoint a UK registered audit firm. An individual UK registered auditor needs to sign the audit report on behalf of the firm.
Some rules relating to approving individuals and firms for registration as auditors have changed: find out more about auditing.
Accounting for EEA companies in the UK
Find out what you need to do if you’re an EEA company working the UK.