In a letter dated 29 Novermber 2016 from Lord Hollick, chair of the Economic Affairs Committee to FRC chief executive Stephen Haddrill, the committee pressed the regulator on its stance.

In particular, it asked whether QC George Bompas’s opinion alters the FRC’s view that ‘concerns expressed on this issue are misconceived’ and whether the regulator will take any further steps to clarify or resolve the difference of opinion.

It also asked whether the concept of prudence may be reinserted into the conceptual framework used by the International Accounting Standards Board (IASB) in writing IFRS, and whether it agrees with the IASB’s definition of prudence.

The row, which stretches back to 2011, centres on interpretation of the Companies Act 2006 in relation to dividend payments based on accounts prepared under International Financial Reporting Standards (IFRS).

The FRC, along with its QC Martin Moore, has maintained the government agrees with its interpretation of the rules. However, a Freedom of Information request from the Local Authority Pension Fund Forum (LAPFF) shows correspondence between the FRC and the government’s former business body, the Department of Business, Innovation and Skills (BIS), which it claims shows the government was not in agreement with the regulator on this issue, even though the FRC claimed it was.

LAPFF has repeatedly challenged the FRC, and in September issued a letter to FTSE 350 boards urging them to ‘disregard’ the regulator’s advice.

Its QC Bompas states that unless the accounts enable a determination of the distributable profits from the numbers as stated in the accounts, then the accounts will not give a true and fair view of the assets, liabilities financial position and profit or loss.

LAPFF’s spokesman told CCH Daily it would not comment until the FRC has responded substantively.

The FRC confirmed it has received Lord Hollick's letter and will respond 'as soon as we can'.

Read Lord Hollick’s letter here.