Reporting on covenants

This guidance assists firms to report in connection with financial covenants in loan agreements and other facilities and replaces M36 Firms' Reports and Duties to Lenders in Connection with Loans and other Facilities to Clients and Related Covenants, which was withdrawn in December 2023.
Loan agreements often contain a number of covenants with which the borrower is expected to comply. Compliance with such covenants is intended to help assure the lender of the continuing security for the loan; borrowers are expected to provide periodic reports on their compliance, which may include a requirement for the borrower to provide the lender with certain reports prepared by their auditor. This Technical Release gives guidance to professional accountancy firms and practitioners in these situations.

The TR can be accessed on the Institute's Technical Hub.