Lab Project Call for Participants: Reporting on the sources and uses of cash
05 December 2018
The Financial Reporting Lab (the Lab) is calling for investors and companies of all sizes to participate in a new project.
Following on from the Lab’s reports on risk, viability and dividend policy this project will explore best practice disclosures around the sources and uses of cash. It will consider how reporting on the location, nature and availability of cash within a group, as well as future uses of cash, can be presented in a way that is most useful to investor decision-making.
The scope of the project
The scope of the project will develop in light of the contribution from those that participate. However, the project is likely to examine disclosures in annual reports and other public communications that help investors to understand:
- What is the make-up, nature and location of cash within a group?
- What is the availability of cash and what restrictions are in place concerning its access and use?
- What are the plans in place for the use of the cash?
We expect to work and report on this project in two phases. The first phase (in Q1 2019) will look at current practice and consider the extent to which it meets investor needs. The second phase (in Q2 2019) will involve company interviews and joint roundtables to address identified gaps in the reporting of cash. We will aim to issue a report combining insight from both phases in Q3 2019.
We invite investors and companies to nominate their interest in participating in the ‘Reporting on the sources and uses of cash project’ by 15 January 2019 via email at FinancialReportingLab@frc.org.uk
The opportunities for participation will develop but typically consist of a combination of individual meetings of an hour and roundtable meetings of 2-3 hours. While we would welcome company participation earlier, we recognise that this may not be practical during the reporting season and this will be factored into the timetable of the project to fit around availability accordingly. Extensive company involvement is unlikely to begin before the annual reporting season has finished. Participants will be kept updated on the progress of the project throughout and are given an opportunity to comment on drafts of the reports where they have been involved.
Further information on the Lab, including its published reports, can be found at https://www.frc.org.uk/Lab