Financial Statements For the year ended
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| Our results Overall, our testing did not identify any evidence of material misstatement in respect of revenue recognition Accurate recognition of intangible assets We identified the accurate recognition of intangible assets as one of the most significant assessed risks of material misstatement due to error. The carrying value of intangible assets as at 31 March 2022 was k. There was a material write off of k made to the balance as at 31 March 2021, which impacts both the current and prior year balance in the financial statements. With the new IFRIC update which came into force in the summer of 2021, there have been changes to the definition of what is allowed to be capitalised on the consolidated balance sheet. There are certain criteria which the revenue contracts need to comply with and a level of judgement is required as to whether the terms of the contract fall into the definition of an intangible asset under International Accounting Standard (‘IAS’) 38 Intangible Assets. As the entity held intangible assets with a carrying value of k as at 31 March 2021, with the majority of those falling into the interpretations of the standard, a review of all existing intangible assets was required and subsequently those which did not provide a resource under the control of the group were written off. As this is a highly judgemental area concerning a significant amount of assets expensed to the consolidated income statement, there is a significant risk of material misstatement due to error. In responding to the key audit matter, we performed the following audit procedures Obtained and reviewed a breakdown of the intangible assets registers for the two balance sheet dates in the scope of the IFRIC from 31 March 2020 to 31 July 2021 – date of the adjustment) along with management’s evaluation of whether they fall into the scope of the IFRIC update Assessed whether management’s judgements on the ability to capitalise and restate intangible assets were reasonable and inline with the standard. We understand that management has consulted with their in- house legal department in interpreting the terms in each supplier agreement and we have obtained evidence of the consultation to challenge whether terms are reviewed and interpreted based on the IFRIC definitions of what is controlled by the entity and the rights around configuration of the assets held and Reperformed management’s calculations in relation to the adjustment and confirmed correct journals have been made across the affected period and adjustment is made consistently across all assets that fall into the scope of the IFRIC. Download 0.68 Mb. Share with your friends:
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