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Brexit and Trump
Financial reporting implications
As businesses develop their responses to the It will be some time before the longer-term effects
of the UK referendum result and the U.S. vote
outcome of the UK referendum on continued EU
become clear. However, in the short-term, elevated
membership and the election of Donald Trump geopolitical instability and economic uncertainty
may result in increased market volatility for asset
in the U.S., the business-as-usual of preparing
prices and exchange rates inter alia.
financial reports and auditing continues. There
As a consequence, audit committees will be
are some short term accounting and reporting
assessing the impact of the increased economic
implications to consider when preparing annual uncertainty and market volatility on annual
financial statements and ensure management are
financial reports.
monitoring developments to assess what impact,
if any, these have on the business model, strategy,
business plans, forecasts and financial reporting.
Communicating impacts and implications
Following the vote results, investors will want to
understand how business models of companies
active on UK and U.S. markets are exposed to each
new opportunity and risk. Transparent business
model disclosure and clarity over longer-term
strategy will be more important than ever during
this period of uncertainty.
Companies may need to reassess their principal
risk disclosures in the context of the changed global
business environment. Do the vote results create
new risks to shareholder value, or change the scale
and likelihood of existing risks?
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