Updating the framework for prospective financial information

There are an increasing number of funding options available to businesses of all sizes. Typically, to access this, businesses will be required to prepare high quality, credible prospective information. A framework for preparers, Prospective Financial Information: Guidance for UK Directors - aimed principally at quoted companies - was developed by ICAEW back in 2003 and we need to refresh this to continue to assist preparers and to promote high quality prospective financial information (PFI).

ICAEW have just published a consultation paper on the plans to update the 2003 framework. I believe that a new framework for preparers has a wider role to play for businesses to communicate PFI and the paper proposes that it be applied to types of PFI beyond the scope of the 2003 framework.

Proposed new guidance will address application in a capital markets transaction context. ICAEW is also consulting on whether separate application guidance would be a useful reference for preparing PFI for private finance-raising, amongst other things.

Areas with an impact on the preparation of PFI include capital markets regulation, business reporting, and accountability and governance and there have been many developments since 2003. In the consultation, we ask what the most important recent and prospective developments are. We also welcome comments on the structure of the framework, and in relation to the topics listed in the consultation and the nature of future application guidance.

Common, principles-based standards could bring to other types of PFI the rigour, discipline and credibility that the current approach supports in PFI prepared for regulated, capital markets transactions. This will be good for the confidence of users as well as for those accountable for PFI.

You can download the consultation paper here. I encourage you to consider the proposals and to send your views or observations to katerina.joannou@icaew.com