The FRC reviewed the reports of 20 quoted companies across a range of industries to assess the quality of interim reporting.

Timely and reliable interim reporting is vital for investors, creditors and other stakeholders to properly understand a company’s financial position, performance and liquidity.

Overall, the FRC said it was pleased with the quality of interim reports, with most companies taking into account FRC Covid-19 recommendations to enhance their disclosures, particularly in relation to going concern and the statement of cash flows.

For significant events and transactions taking place during the interim period, such as impairments, many companies provided detailed explanations and other helpful information normally reserved for the annual reports and accounts. An area of improvement, however, was with regard to providing better explanations on balance sheet movements.

David Rule, the FRC’s executive director of supervision, said: “Given the ongoing impact of the Covid-19 pandemic, the 2021 interim reporting season is likely to be one of the most important and consequential for users of corporate reports.

“High-quality reporting is vital for investors and other users of accounts to make better informed decisions about a company’s health and prospects. While it is pleasing many companies followed the FRC’s Covid-19 guidance, there is still room for further improvement particularly around providing better and clearer explanations of the impact of significant events on financial statements.”

Andrew Ninian, director for stewardship and corporate governance at the Investment Association, added: “Investors rely on high-quality interim reporting, particularly in times of uncertainty, to support companies and take informed decisions on their long-term future. We welcome the findings of the Financial Reporting Council’s report and encourage companies to heed the best practice examples and make improvements to their reporting where necessary.”