2022

There are many conventional ways of raising Working Capital.  Why, therefore, do companies use reverse factoring?

Maybe reverse factoring is used because other credit lines are not available to them.  Is it a red flag moment?

Reverse factoring has been a convenient way of hiding and disguising these problems – as was seen with Carillion where approximately £0.5bn of debt apparently merited little more than a footnote in the notes to the financial statements.

Patrick Hosking reports in the Times: ‘Ministers are rowing back from a radical plan to encourage pension funds to invest in unlisted assets after getting a mixed response from the investment industry and an emphatic thumbs-down from consumer groups.’

The FCA’s goals to achieve the best possible outcomes for consumers are laudable. 

We agree with the FCA that ‘firms should be competing vigorously in the interests of consumers’ but regulation to protect consumers from harm is not synonymous with firms’ prioritising  consumer interests.   More emphasis is needed on firms providing a duty of care to consumers. See our response here.

UKEB are assessing IFRS 17 Insurance Contracts for adoption in the UK under its endorsement criteria implemented on exiting the EU. While insurance companies desperately need accounting standards to stop them flattering their accounts, UKSA and ShareSoc are not convinced that IFRS 17 meets UKEB’s endorsement criteria.

The FCA has published this alert at London Capital and Finance plc | FCA.

The FCA warns that some investors have received unsolicited calls, emails and other correspondence seemingly to be from, or be assisting, the LCF administrators. The communications claim to be about dividend payments or compensation on investments.

We register our deep concern about the suggestions in this consultation paper.  Why?

To improve disclosures, the International Accounting Standards Board (IASB) has developed guidance it will apply when developing and drafting disclosure requirements in IFRS Standards.

The IASB has applied its new guidance in its proposed amendments to the disclosure sections of IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits. It wants feedback on both the guidance and the proposed amendments to IFRS 13 and IAS 19.

In a letter to UK bank chief executives, the BoE said its analysis of the circumstances of the Archegos failure had found “significant cross-firm deficiencies” in the way bank prime brokerage businesses allowed the fund to build up huge loans that it ultimately defaulted on.

Interesting. How often have we been told that the great clean-up after the Great Financial Crisis had made it the Crisis to End all Crises?

Apparently there is a bit more tidying to do.