Operating and Financial Review – Preparers' Guide: Give yourself a head start

January 2006
Following the Chancellors announcement on November 28, the requirement that all UK quoted companies must publish an Operating and Financial Review (OFR) is in the process of being repealed and replaced with the requirement to publish a Business Review.

Until the Government provides greater clarity, we believe that the concept of an OFR has not disappeared. The degree to which the content of the Business Review is consistent with the OFR, either explicitly or implicitly is a matter of much debate. However, it is clear that many of the fundamental requirements of the OFR, such as business objectives and strategy, risks and uncertainties and key performance indicators, will remain. This view is supported by the Government's statement that "the central requirements of the business review are largely the same as those of the statutory OFR".

Our best advice to companies is therefore to continue with the processes they have already put in place. This stance is consistent with the Financial Reporting Council's who recently announced that, in their view, the existing ASB Reporting Standard will remain as voluntary good practice guidance.

We remain committed to helping our clients get the most out of their corporate reporting. Whilst our "Give yourself a head start" guide was originally published to help companies to comply with the legal requirements of the OFR, it still provides good guidance on complying in the changing regulatory environment and with moving towards transparent reporting.