Financial reporting – Kpmg

The Financial Reporting Council of Nigeria (Amendment) Act 2023 (“the Act” or “Amended Act”) introduces several key modifications to the provisions of the FRCN 2011 Act (“the Principal Act”). These changes are intended to enhance transparency, accountability, good governance, and sustainable development within Nigeria’s business sector.
In this analysis, we will outline the major developments introduced by the Act and their significant impacts on businesses in Nigeria, with a particular focus on financial reporting.
1. Expansion of the PIE Definition
The Amended Act refines the definition of Public Interest Entities (PIEs) to include a broader range of entities, thereby expanding the scope of financial reporting requirements:
● Government and government organizations
● Listed entities on any recognized exchange in Nigeria
● Non-listed entities that are regulated
● Public limited companies
● Private companies that are holding companies of public or regulated entities
● Concession entities
● Privatized entities with government interest
● Entities engaged in public works with annual contracts of NGN 1 billion or more, funded by public funds
● Government licenses
● Entities with an annual turnover of NGN 30 billion or more
Previously, PIEs were described more narrowly, which led to ambiguity and varying interpretations. This broadening aims to reduce uncertainty and ensure comprehensive financial reporting across more sectors.