The Financial Reporting Council Releases its Annual Report

The FRC has stated that its audit, accountancy and corporate government related business suffered a 1.7 million pounds loss to face a deficit of 592,000 pounds in comparison to a profit of 1.151million pounds in 2010-11. The Financial Reporting Council shared the figures in its annual accounting report for 2011-12. The Financial Reporting Council’s planning& policy manager, David Andrews stated that there were quite a few reasons behind the deficit, especially a rise in operating expense of 2.4 million pounds. He further mentioned that in 2011-12, the FRC incurred expenses amounting to 0.7 million pounds, in order to reform the organization’s structure and power.

He also clarified that the appointment of new staff as well as non-executives was important last year and hence the recruitment related costs increased by 0.3 million pounds. On the other hand, income was 700,000 pounds higher as a result of increased rates of collection as compared to 2010-11, which implies that more organizations paid in comparison to previous year. After having acquired huge surplus during 2010-11, the FRC’s intended to minimize the average cost payable by organization and hence the average rate reductions stood at around seven per cent.

But, the total amount spent in 2011-12 was 1.1 million pound less in comparison to the budget, even as FRC made savings on auditing inspection and discipline related case amount. In auditing inspection, the minimized expenditure was due to staffing as well as more than expected amount recovered from third party related works. FRC’s auditing inspection related costs stood at 2.4 million pounds or 11.3 per cent of the budget, whereas its actuarial discipline related cases expense and accountancy costs stood at 3.8 million pound in 2011-12 or 17.5 per cent of the budget, in comparison to 2.8 million pounds in 2010-11.

In addition to releasing the figures, the Financial Reporting Council shared its plan for the future of FRS (Financial Reporting Standards) as well. The FRC stated that their proposals recommend the replacement of all existing accounting principles with a single Financial Reporting Standard. The FRC has also emphasized on the introduction of minimized disclosure related framework and reserving the FRC for smaller organizations. The reviewed proposals are likely to be effective from 1^st of January 2015.