Financial Reporting Lab issues insight report on ‘Clear & Concise’ reporting
News types: Guidance
Published: 12 August 2014
PN 49/14
The Financial Reporting Council’s (FRC) Financial Reporting Lab (Lab) has today published an insight report; ‘Towards Clear & Concise Reporting’ (PDF). This examines progress made by companies towards producing relevant and succinct annual reports and accounts, and provides ideas on how companies can make further progress.
Based on a review of the most recent round of annual reports published by FTSE 350 companies, the Lab encourages companies to think about:
the communication channels used and how to match information to users’ needs;
how to focus content on what is most important to investors;
removing immaterial disclosures ;
using cross-referencing and layout to improve clarity; and
planning ahead.
The report also gives practical insight on the process of change and how BP and Prudential have managed this.
Sue Harding, Director of the Financial Reporting Lab, said:
“The FRC’s Clear & Concise reporting work seeks to promote reporting from which investors can, with justifiable confidence, draw conclusions about a company’s performance, position and prospects. Now is an ideal time for companies to think about how to take steps to make their next annual reports clearer and more concise. This Lab insight report provides examples of how companies are actively working to improve their annual reports and accounts and identifies some questions companies may wish to address. By sharing observations on steps already being taken by some companies, we aim to provide a useful source of ideas to act as an impetus for further progress towards clear and concise reporting.”
Notes to editors:
The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We also monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.
The Financial Reporting Lab was set up and is funded by, the UK’s Financial Reporting Council. Its aim is to help improve the effectiveness of corporate reporting. The Lab provides a unique environment where investors and companies can come together to develop pragmatic solutions to today’s reporting needs.
- As a learning space, companies can use the Lab to test new and advanced reporting formats with investors, and investors can indicate areas where management can add greater value through the information they provide;
- As a hub to support innovation in reporting, the Lab’s focus on gathering and sharing evidence from the market provides the broader corporate community with feedback from investors on the value that new reporting formats bring.
- Insight reports are designed to give an overview on current practice. They are prepared by the Lab and do not contain views of investors.
The Clear & Concise initiative was launched by the FRC in June. The initiative is part of the FRC’s continuing effort to address some of the common criticisms about the quality of communication in annual reports.