Impact Analysis of the Financial Reporting Council of Nigeria (Amendment) Act, 2023 on Businesses

The Financial Reporting Council of Nigeria (Amendment) Act 2023 (“the Act” or “Amended Act”) introduces several modifications to some of the provisions of the FRCN 2011 Act (“the Principal Act”). These amendments are designed to advance transparency, accountability, good governance, and sustainable development within Nigeria’s business sector.

In this publication, we have outlined the major developments that would have significant impacts on businesses in Nigeria.

The Financial Reporting Act (as amended) has provided a refined definition of Public Interest Entities (PIEs) to include:

• Government and government organizations;
• Listed entities of 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;
• Privatised entities in which government retains an interest;
• Entities engaged by any tier of government in public works with annual contract sum of NGN 1 billion and above, and settled from public funds;
• Licenses of government; and • entities that have an annual turnover of NGN 30 billion and above.

Prior to this amendment, PIEs were described as government, government organisations, quoted and unquoted companies and other organizations required by law to file returns with regulatory authorities with the exclusion of private companies that only file to Corporate Affairs Commission and Federal Inland Revenue Service, this created ambiguity and was subject to interpretation.

The Act establishes a national repository where public interest organizations can electronically submit their general-purpose financial accounts. This creates a central database for PIEs financials and to revolutionize the reporting process.