International Accounting Standards Board (IASB) chairman Hans Hoogervorst has laid out a ten-point plan to deliver tangible improvements to disclosures in financial reporting in a speech at the IFRS conference in Amsterdam.

Hoogervorst said companies’ annual reports are "ballooning", however the useful information contained within those reports has not necessarily been increasing at the same rate.

Hoogervorst added that there is an "understandable risk-aversion on the part of preparers, auditors and regulators", which can lead to a "ticking-the-box mentality".

In order to simplify disclosures Hoogervors suggested eight quick possible measures, which could lead to "tangible results in the short run" and two more extensive measures requiring additional work by the IASB and its stakeholders.

The eight quick fix measures proposed are:
1. Clarifying in IAS 1 that the materiality principle does not only mean that
material items should be included, but also that it can be better to exclude nonmaterial disclosures.
2. Clarifying that a materiality assessment applies to the whole of the financial
statements, including the notes.
3. Clarifying that if a standard is relevant to the financial statements of an
entity, it does not automatically follow that every disclosure requirement in that
standard will provide material information. Instead, each disclosure will have to be
judged individually for materiality.
4. Removing language from IAS 1 that has been interpreted as prescribing the
order of the notes to the financial statements. This should make it easier for entities
to communicate their information in a more logical and holistic fashion.
5. Ensuring IAS1 gives companies flexibility about where they disclose accounting policies in the financial statements.
6. Consider adding a net-debt reconciliation requirement. This would provide users with clarity around what the company is calling ‘net debt’ and also consolidate and link the clutter of scattered debt disclosures through the financial statements.
7. Look into creating of general application guidance or educational material on materiality.
8. When developing new standards seek to use less prescriptive wordings for disclosure requirements.

The last two points were focused around the research work the IASB is to carry out on IAS 1, IAS 7 and IAS 8 and the undertaking of a general review of disclosure requirements in existing standards

Hoogervorst added that the IASB tested out the ten-point plan on its financial disclosure and that as a result the IASB managed to reduce their 2012 Annual Report by 25% while increasing the amount of useful information in the report.

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Speech by Hans Hoogervorst: ‘Breaking the boilerplate’