Better Communication in Financial Reporting

The objective of financial reporting is to provide financial information that is useful to investors in making decisions. It is important that the financial information provided to those investors is communicated effectively.

Now that the Board’s work on a number of major projects has come to an end, investors have asked us to refocus our activities on projects designed to make financial information more relevant to them and improve the communication of that information.

They told us that at present, valuable information is often hidden by ‘boiler-plate’ disclosures and that financial information is often poorly presented. It can be difficult and time-consuming for investors to identify the most useful information from amongst all the information that is disclosed. The Board wants to make the communication of financial information more effective and, hence, Better Communication in Financial Reporting will be a theme underlying much of our work for the next few years.

The Board has identified several projects that it will develop to support better communication. Those projects include the projects previously grouped under the heading 'Disclosure Initiative'. Click on the project name to read more.

Project Status
Primary Financial Statements This research project is examining potential targeted improvements to the structure and content of the primary financial statements with a particular focus on the statement(s) of financial performance and the statement of cash flows.
Principles of Disclosure The Board has published a Discussion Paper that suggests principles governing what, how and where information should be disclosed in the financial statements to improve the information provided to users of financial statements.

The Discussion Paper seeks public feedback on disclosure issues the Board has identified through outreach as well as its preliminary proposals to resolve these issues. Ultimately, it is expected that the Discussion paper could lead to amendments to IAS 1 Presentation of Financial Statements—the Standard covering general disclosure requirements—or the development of a new general disclosure Standard.
Definition of Material The Board proposes to clarify and align the definition of 'material' and provides guidance to help improve consistency in the application of that concept whenever it is used in IFRS Standards.
Materiality Practice Statement The objective of this project is to help companies make materiality judgements in the preparation of IFRS financial statements.
IFRS Taxonomy The Board will focus on a number of areas:

  1. content: ensure that IFRS Standards and identified common practice are reflected within the taxonomy in an accurate and timely manner.
  2. adoption and implementation: support accurate tagging by preparers and use of the IFRS Taxonomy by regulators.
  3. interaction between electronic reporting and principle-based standard-setting: specific focus on the management of disclosures not explicitly covered within the IFRS Taxonomy (‘company-specific disclosures’).
  4. technology: the wider impact technology may have on the relevance of the Standards and the IFRS Taxonomy.
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