The speculation and rumour-mongering during the long wait for the first Budget from the new Chancellor of the Exchequer is finally over. After all the speculation of what may or may not happen, a number of small measures with individually limited impact is certainly not what the market expected. Perhaps the most significant measure for a small number of individuals is the 10% Founders Relief for Capital Gains Tax, however, the consultation on the proposed qualifying conditions suggest that the relief is only likely to be possible for an extremely small number of founder shareholders of businesses that are now listed on AIM.
One thing is certain, in the time that has elapsed between the appointment of the new Prime Minister and his Chancellor’s first Budget, some companies may have put-off making financial decisions, and others may have weighed-up whether to invest, float or acquire (or not), based on media conjecture, assumptions by high-profile ‘talking heads’ and backroom suspicions. Management teams can get caught in a loop of reacting to external events rather than taking their company’s destiny into their own hands.
However, in the immediate future there are some decisions that owners and CFOs need to address. They may not be headline grabbing – new accounting standards rarely are – but they are significant, and the approach that management choses to take could have a positive uplift on the company’s profile as well as its relationship with investors.
On the horizon, and mandatory from 1 January, 2027, is IFRS 18 – the biggest change to reporting requirements since IFRS 16 came into effect in 2019. Companies will need to prepare for this change, if they are not already, over the next couple of months as it will have a big impact on the appearance, content, and way in which the Annual Report will potentially be used in future. For example, comparative information will be required for December 2027 year ends, making it easier for investors to assess a company’s performance against other potential investments in the market.
Companies will need to rethink how they classify items in the primary statements such as, what should be included and where on the P&L and balance sheet. There will be new disclosures for management-defined performance metrics including, adjusted profits, underlying earnings, and operating profits before exceptional items; and there will be enhanced aggregation/disaggregation requirements such as, more discipline around exceptional items, grouping of expenses, and the disclosure of material classes of transactions.
On top of this significant change are new amendments to IFRS 9, 7 and 19 as well as an ongoing focus on FRC thematic expectations in corporate reporting.
What all of this means is that there has never been a better time for Boards and management teams to take a fresh look at their corporate reporting and reconsider not just the back end but also the front end of their company’s Annual Report & Accounts.
Refresh how the company is telling its story to its investors and potential investors. Frequently, companies get stuck in a rut when it comes to the annual reporting cycle. Unbelievably, some people find that the process for preparing a company’s accounts for reporting purposes is quite a dull exercise. But this is missing a golden opportunity for inward reflection on the company’s achievements, the face it wants to present to the world, and how it can tell its story in the best possible way. Change it up!
Another huge temptation for companies when preparing their Annual Report, particularly the front end, is to rely on generative AI to provide the first draft. (With that in mind, considering the recent Armageddon-style announcements surrounding AI’s progress of late, it might be worth management teams including a statement on their company’s AI use as part of their reporting. A due diligence approach that outlines what AI is used, where and for what processes and purposes, would be a welcome addition.)
Listed companies should take care and be judicious in their approach when using AI to help draft their Annual Report. There is a risk that the end result could look like every other company’s report: using the same structure, content and language. Show your shareholders and stakeholders a bit of care and attention by telling your story in your own words – give your corporate reporting a human touch!
This article was originally published in the October 2026 AIM Advisers Rankings Guide. For more information, please contact Joseph Archer.
