Financial Reporting Council calls for transparency in supply arrangements

The Financial Reporting Council (FRC) has called for greater transparency over complex supplier arrangements.

The move came a day after Mr Kipling owner Premier Foods announced it was moving to more conventional arrangements after being criticised for requesting payments from third-party suppliers.

Richard Fleck, chairman of the FRC’s Financial Reporting Review Panel, said: “Complex supplier arrangements such as fees and discounts may have a significant impact on the reported margins and other results of a company and on investors’ views of its performance.

“Where this is the case, it is essential that investors are able to understand the basis and extent of judgment and estimation involved, and the potential uncertainties affecting the accounts and future prospects.”