News February 2015 FRC publishes Financial Reporting Lab case study on accounting policies

FRC publishes Financial Reporting Lab case study on accounting policies

05 February 2015

PN 10/15

The Financial Reporting Council’s (FRC) Financial Reporting Lab (Lab) has found that investors support fresh approaches to the disclosure of accounting policies. 

Building on the Lab’s recent report ‘Accounting policies and integration of related financial information’, the Lab has published a case study conducted among some of William Hill plc’s investors (PDF), retail shareholders, and analysts.  The study highlights the company’s experimentation with accounting policy disclosure.  The company's investors and analysts liked the clear identification of significant accounting policies, and effective disclosure of policy information in order to understand the business and its performance.

This is the first of a series of case studies being run by the Lab to support the FRC’s Clear & Concise reporting initiative that promotes transparent and accessible reporting. 

Sue Harding, Director of the Financial Reporting Lab, said: 

“Investors support companies improving their accounting policy disclosures and making clear which policies are significant in the context of the company’s business. It is encouraging to see that William Hill has had the courage to do things differently. Companies should be encouraged by investor support for appropriate innovation and consider carefully how they might implement similar measures in their own reporting.”

A copy of the report can be downloaded from the FRC website: https://frc.org.uk/Lab/Reports

Notes to editors:

  1. 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.
  2. The Financial Reporting 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. More information about the Lab’s work can be found here.
  3. 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. Further information on the initiative including the work programme is available at http://www.frc.org.uk/Our-Work/Headline-projects/Clear-Concise.aspx