FRC calls for transparency in corporate reports

The Financial Reporting Council (FRC) will conduct a thematic review of companies’ tax reporting to encourage more transparent recording of the relationship between tax charges and accounting profit.

The council will write to FTSE 350 companies before their year ends informing them that the corporate reporting review team will examine the tax disclosures in their next published reports.

The FRC plans to take a particular interest in the transparency of tax reconciliation disclosures and how well the sustainability of the effective tax rate is conveyed. It will also focus on uncertainties relating to tax liabilities (and assets) where the value at risk in the short term is not identified.

Geoffrey Green chairman of the FRC’s financial reporting review panel and member of the conduct committee said: “There is considerable public interest in international tax arrangements prompted by developments in the UK and globally. Investors have a...