1.23 The two named sources of 2025 commercial income account for only 66% of it
UK Company B · a UK-listed technology and logistics group · Regulator-style question
In brief
Note 2.9 says commercial income comes from ([wording masked], and gives them as [n]% and 10% of commercial income for the 18 weeks to [date]. Those shares add to 66%, while the same two sources made up 100% in 2024 ([n]% + [n]%). Either a third source of about a third of commercial income is not described, or the percentages were not worked on the same basis as the amounts.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2025, page 212; Annual Report 2024, page 189. 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.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows p.212: promotional allowances [amount] or [n]%, rebates [amount] or 10% of commercial income; [n]% + 10% = 66% | What the rule requires Shares that add to 100% (on the two named sources, [n] / [n] = 85% and [n] / [n] = 15%), or a description and amount of any other source of commercial income |
The rule
IAS 1 Presentation of Financial Statements, paragraph 15
Version relied on: UK-adopted international accounting standards (UK Endorsement Board), as in force for financial years beginning in or after January 2025
The accounts must give a fair presentation of financial position, performance and cash flows.
Why it applies here: either the two percentages were not updated on the same basis as the amounts, or commercial income now includes a third component (for example media income, which the 2024 report mentioned) that the note does not describe.
Why it matters
A reader cannot tell what about a third of the discontinued operation's supplier income was, or whether the shares need correcting.
Exposure
Narrative description within a note on a discontinued operation; no primary statement figure is affected.
Our workings
the policy on p.212 names two sources of supplier commercial income and gives their 2025 shares as [n]% and 10%, with 2024 shares of [n]% and [n]%. The 2024 report gave [n]% and [n]% for 2024 and 85% and 15% for 2023, each pair adding to 100%.
[n]% + 10% = 66%; the two amounts give [n] + [n] = [n], on which the shares are 85% and 15%. If [n]% is right, commercial income was [n] / [n] = [n], leaving [n] - [n] = [n] unexplained.
Only the company can say which.
| Measure | 2025 (18 weeks) | 2024 (52 weeks) |
|---|---|---|
| Shares printed | [n]% + 10% = 66% | [n]% + [n]% = 100% |
| Share not explained | 100% - 66% = [n]% | 100% - 100% = [n]% |
| Sum of the two named sources (£m) | [n] + [n] = [n] | [n] + [n] = [n] |
| Promotional allowances share of the two | [n] / [n] = 85% | [n] / [n] = [n]% |
| Rebates share of the two | [n] / [n] = 15% | [n] / [n] = [n]% |
| Commercial income implied by the [n]% (£m) | [n] / [n] = [n] | [n] / [n] = [n] |
| Unexplained if [n]% is right (£m) | [n] - [n] = [n] | n/a |
Management’s best defence, and our reply
The finance team could say that [former subsidiary]'s commercial income also includes media and marketing income from suppliers, which the 2024 report mentioned, so the two named sources need not add to 100%. They could add that the operation was consolidated for only 18 weeks and is now discontinued, so the description carries little weight. That reading is tenable, which is why the point is put as a question; but the note names only two sources and the same sentence in the two earlier years added to 100%, so the note should either say what the rest is or correct the shares.
The fix
- Either restate the shares on the two named sources (about 85% and 15%) or name and quantify the other source of commercial income.
Question for the company
The 2025 note gives promotional allowances and volume-related rebates as [n]% and 10% of commercial income (66% together), while in 2024 they made up 100%. Does commercial income for the 18 weeks include another source, such as media income, and if so what was it and how much; or should the shares read about 85% and 15%?
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | the policy names two sources of commercial income | Document | Annual Report 2025, page 212 |
| 2 | the 2025 shares are [n]% and 10% (together 66%); the 2024 shares are [n]% and [n]% | Document | Annual Report 2025, page 212 |
| 3 | in the 2024 report the two sources made up 100% of commercial income in both years shown | Document | Annual Report 2024, page 189 |
| 4 | the 2024 report referred to media and other income alongside the two named sources | Document | Annual Report 2024, page 189 |
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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