7.02 Labels and footnotes in the group statements: associate line, orphan footnote and a typo
UK Company A · a UK-listed medical technology group · Drafting slip
In brief
The cash flow statement and the segment reconciliation label the associate line 'Share of results of associates', but the figure includes the reversal of the [name] impairment; the income statement labels the same figure '[wording masked]'. The statement of changes in equity carries a footnote 5 that no line refers to. Note 2.1 reads '[wording masked]'.
The evidence, as filed
Further pages withheld to protect the company’s identity (four): Annual Report 2025, page 235; Annual Report 2025, page 220; Annual Report 2025, page 214; Annual Report 2025, page 219. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
Names, figures, dates, logos and any wording that could be searched back to the company are boxed out in grey; the point is highlighted in yellow.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows Cash flow statement and the segment profit reconciliation: 'Share of results of associates' for a figure that includes an impairment reversal. Statement of changes in equity: a footnote on share issues with no reference marker. Revenue disaggregation note: '[wording masked]'. | What the rule requires '[wording masked]' in the cash flow statement and the segment reconciliation, as in the income statement; the share-issue footnote removed or attached to a line; 'by product and business unit'. |
Why it matters
Cosmetic; a reader of the cash flow statement may take the [amount] adjustment to be the share of associates' profits alone.
Exposure
Drafting only.
Our workings
the income statement line includes the reversal of the impairment of the associate (Note 11 says the income statement gain includes a reversal of impairment of [amount]) and is labelled accordingly; the cash flow statement adjustment and the Note 2.2 reconciliation use the shorter label for the same figure. The statement of changes in equity footnote 5 refers to the issue of share capital under share incentive plans, but no line or column carries the marker 5 and no share issue appears in the table. Note 2.1 contains a doubled word. None of these changes any figure.
Management’s best defence, and our reply
The company may say the shorter label is a space-saving abbreviation and that Note 11 explains the composition. The point is cosmetic and is recorded only as a drafting slip.
The fix
- Use the income statement label in the cash flow statement and Note 2.2; delete or attach footnote 5; correct the Note 2.1 wording.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | Cash flow statement label for the associate adjustment | Document | Annual Report 2025, page 213 |
| 2 | Income statement label for the same figure | Document | Annual Report 2025, page 211 |
| 3 | Note 11: the figure includes an impairment reversal | Document | Annual Report 2025, page 235 |
| 4 | Note 2.2 reconciliation uses the short label | Document | Annual Report 2025, page 220 |
| 5 | Footnote 5 of the statement of changes in equity, referenced by no line | Document | Annual Report 2025, page 214 |
| 6 | Doubled word in Note 2.1 | Document | Annual Report 2025, page 219 |
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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