ASB reviews narrative reporting in the UK

The Accounting Standards Board (ASB) has published its first review of narrative reporting by UK listed companies. The review found that while most companies were good at describing their strategy and current performance, they were weaker on providing forward looking information and identifying their principal risks and how they are managed. As part of its role in promoting confidence in corporate reporting, the ASB will continue to be a leading contributor to any international developments on management commentary.

IASB/FASB vision of financial statement presentation

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) are unveiling their vision of the future of financial statement presentation. Launched in 2004, the joint IASB/FASB effort first concentrated on the income statement (the presentation of income and expenses) but has now been broadened to include the complete set of financial statements. In May 2007, the two bodies posted an update on the IASB website and the FASB website detailing the progress and offering tentative examples of what financial statements might look like in the future.

SEC to streamline financial reporting

The US Securities and Exchange Commission is forming an advisory committee to study the US financial reporting system with the goals of reducing unnecessary complexity and making information more useful and understandable for investors. The SEC Advisory Committee on Improvements to Financial Reporting will study the causes of complexity and recommend how to make financial reports clearer and more beneficial to investors, reduce costs and unnecessary burdens for preparers, and better utilize advances in technology to enhance all aspects of financial reporting. The Committee is expected to issue a final report in August 2008 (view the SEC Press Release and Video Webcast).

Corporate Reporting on the Internet - Stock exchange perspective

In 2003, the Toronto Stock Exchange (TSX) updated Electronic Communications Disclosure Guidelines. The TSX strongly recommends that all listed issuers maintain a corporate web site to make investor relations information available electronically. It also maintains that disclosure by the Internet alone will not meet an issuer’s disclosure requirements and an issuer must continue to use traditional means of dissemination. The overall objective is to encourage the use of electronic media to make investor information accessible, accurate and timely. The challenge is to ensure that regulatory concerns are addressed without impeding innovation.

Corporate Reporting on the Internet - Standard-setters perspective

In 2000, the United States Financial Accounting Standards Board (FASB) issued a report on Electronic Distribution of Business Reporting Information as part of its Business Reporting Research Project (BRRP). The report examined the kind of business information corporations were reporting outside of financial statements. In 2002, the International Federation of Accountants (IFAC) issued a paper Financial Reporting on the Internet. The purpose was to stimulate discussion of issues faced by enterprises that, in addition to communicating financial information through the traditional paper medium, also choose to communicate financial information on their corporate website.