Investors want to see more informative capital
management disclosures in annual reports, according to a study by
the Accounting Standards Board (ASB).
The ASB’s study, Financial capital
management disclosure, found investors are interested in how
much financial capital a business needs and whether there is a
surplus or a deficit.
The study of the quality of capital management disclosures
concluded there is good practice in place but too often there is
excessive boilerplate text and too many companies miss essential
elements of the required disclosures.
“Capital management is a key discipline that should be on the
regular agenda of all boards,” ASB chairman Roger Marshall said.
“Adequate capital supports growth and provides a buffer against
significant economic shocks so reducing the risk of a liquidity
crisis. This is particularly important at present given the
pressures on particular sectors facing the impact of reduced
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