Aidan Clifford, ACCA Ireland advisory services manager

Directors’ loans

A common query to advisory services is the disclosures required for credit directors’ loans. Section 307 of the Companies Act 2014 requires detailed disclosure for loans entered into by the company ‘with or for’ its directors. What is unclear is whether ‘with or for’ means debit loans only or debit and credit loans.

If it means debit loans only, then the disclosure is that required at Section 309, which is:

  • particulars of the principal terms of the arrangement or transaction
  • the name of the director or other person with the material interest
  • the nature of the interest

There is a blanket exemption for loans that are less than 1% of net assets to a maximum of €15,000 with a minimum of €5,000, and there are other terms and conditions in Section 309.

If it means debit and credit loans, then Section 307 applies. The disclosures are:

  • the name of the person for whom the arrangements were made and, where that person is or was connected with a director of the company or undertaking, the name of the director
  • the value of the arrangements at the beginning and end of the financial year
  • advances made under the arrangements during the financial year
  • amounts repaid under the arrangements during the financial year
  • the amounts of any allowance made during the financial year in respect of any failure or anticipated failure by the borrower to repay the whole or part of the outstanding amount
  • the maximum amount outstanding under the arrangements during the financial year
  • an indication of the interest rate
  • the arrangements’ other main conditions

An anti-money laundering and terrorist financing consultation group has been formed, chaired by a detective chief superintendent in the Garda National Economic Crime Bureau and hosted by ACCA

If the amount is more than 10% of the net assets of the company, the aggregate amount shall be stated and the percentage of net assets that the total represents.  There is a blanket exemption in this section for loans that are less than €7,500.

Financial statement discourse

The UK’s Financial Reporting Council (FRC) has published updated guidance for companies and auditors to ensure high-quality financial information is made available to stakeholders.

Covid-19 ethical guidance

The FRC and the International Ethics Standards Board for Accountants jointly released Ethical and Auditing Implications Arising from Government-Backed COVID-19 Business Support Schemes. The guidance sets out important ethical considerations for accountants who are called upon to assist their employing organisations or clients in applying for and using Covid-19-related funding or financial support.

The document includes guidance for those who prepare related financial information and disclosures, as well as for those who independently audit or provide assurance services regarding such information.

AMLTF under scrutiny

An anti-money laundering and terrorist financing (AMLTF) consultation group for the professional practice sector has been formed, chaired by a detective chief superintendent in the Garda National Economic Crime Bureau and hosted by ACCA with representatives from all of the professional bodies involved. The new group will facilitate:

  • rapid dissemination of information to accounting practices to stop new or novel AMLTF activities
  • sharing of information on trends and control measures
  • mutual sharing of practical difficulties encountered in the operation of controls and reporting
  • sharing of best practice in professional practices
  • developing guidance to assist practices in their compliance

The group will also meet one of the recommendations of the Financial Action Task Force evaluation, which required better cooperation between the Department  of Justice and professional practice.

IAASA enforcement

A summary of the enforcement activities in the area of financial reporting has been published by the Irish Auditing & Accounting Supervisory Authority. The document covers a review of Bank of Cyprus Holdings, C&C Group, FBD Holdings, Irish Continental Group and Permanent TSB. Findings were made in the area of IAS 10, Events after the Reporting Period; IAS 36, Impairment of Assets; IFRS 7, Financial Instruments: Disclosures; and IFRS 16, Leases.

C&C Group successfully argued that Covid-19 was an adjusting event for a year ended 28 February. The World Health Organization declared Covid-19 as a global pandemic on 11 March 2020. C&C Group successfully argued that the virus was in Europe prior to its year-end reporting date and because of that it recognised an exceptional charge of €47.6m.

FBD Holdings defended its impairment testing process but agreed to additional disclosures in future. Irish Continental Group successfully defended its accounting for long land leases. Permanent TSB Group also defended its impairment accounting and agreed to expand it disclosures in this regard.

Support for new staff

The International Federation of Accountants has issued guidance on how to recruit staff to undertake remote working during a pandemic. This includes a checklist of matters for the employer to consider, including getting the technology and environment right, setting work expectations and staff interactions.

Remote working strategy

Post-pandemic, it seems likely many people will be returning to blended working, with some days at home and some in a central office.  The government recognises this and has published a remote working strategy.

The guide covers topics ranging from better broadband to the right to disconnect and certain rights to request remote working. The creation of remote working hubs and a review of the tax treatment of home office expenses are also addressed.