Announcement of preliminary accounts: technical Q&A for firms

Questions and answers relating to the moratorium on the publication of preliminary financial statements.

What is the purpose of the FCA’s action?

Its purpose is to ensure listed companies and their boards are not rushed into preliminary financial statements during the fast-changing circumstances presented by coronavirus.

Has the FCA asked for a moratorium on all corporate reporting?

No. The FCA’s statement refers only to preliminary results due to be published within the next two weeks.

Is the moratorium compulsory?

No. The moratorium is entirely voluntary. As we have said, the unprecedented events of the last couple of weeks mean that the basis on which companies are reporting and planning is changing rapidly. We ask companies to observe the moratorium so that they can give due consideration to recent events. Observing timetables set before this crisis arose may not give companies the necessary time to do this. We also believe the practice of issuing preliminary financial statements in advance of the full audited financial statements is adding unnecessarily to the pressure on companies and the audit profession at this moment.

Does the announcement cover Alternative Investment Market (AIM) companies?

No. The announcement relates to officially listed companies. AIM companies should consult their Nominated Advisers (NOMAD). We understand AIM have written to NOMADs on this matter.

We had planned a preliminary announcement. Can we instead issue a Q4 trading update? Would that breach the ‘spirit’ of the moratorium?

No, it is a sensible response to our request entirely in line with our aims. As we say in our announcement, the Market Abuse Regulation (MAR) remains in full force and listed companies are still required to announce inside information to the market as soon as possible unless a valid reason to delay disclosure under the regulation exists. Our announcement addresses difficulties preparing audited financial statements at this time. 

Our company had largely completed all its reporting processes; we have few UK operations and are not particularly impacted by recent Government announcements – must we delay?

The moratorium is voluntary. Each board must take its own decision based on its own circumstances. We are well aware that changing Government policy and interventions in the UK and indeed around the world will represent a material consideration for some companies but will be less material for others. We are seeking to relieve the burden on companies while maintaining flows of information to investors. In some individual circumstances, delay may add to the burden on the company, and if so boards may choose not to observe the moratorium.

How does the announcement relate to the filing of final audited reports?

The announcement relates to preliminary annual accounts, not final audited reports. There is a principle underlying our request which could be applied to final reports: this is that, subject to MAR being observed, it should be acceptable for companies to use the full time available to them in the rules and regulation to publish their reports. However, if the work is complete on the final audited report, and appropriate consideration has been given to recent economic developments, it would make sense to finalise the report. This is a matter for the board to consider.