View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
November 14, 2007

UK companies prepare for longer half-yearly reports

UK companies prepare for longer half-yearly reports

The introduction of new half-yearly reports is likely to produce significant changes in transparency requirements and the detail of communication between UK companies and capital market participants, according to a KPMG UK study.

New half-yearly report requirements are about to come into effect, under the International Accounting Standard (IAS) 34 Interim Financial Reporting, implemented in the UK from 20 January 2007. Companies with a March year-end will release their interim results under the new rules later this month. The survey was conducted to assess the impact that the new IAS 34 requirements had on UK fully listed companies. It looked at 25 companies in Germany, where the new standard was implemented earlier, and at six examples of the first UK companies to apply the new requirements.

According to the KPMG study, the length of UK half-yearly reports ranged from 11 to 24 pages, which was shorter than the reports of German companies where page numbers ranged from 20 to 86 pages. Additional observations revealed that the condensed set of financial statements of UK companies averaged nine pages, while German companies averaged 19 pages. Financial information also varied by company and sector, however financial institutions provided more extensive disclosures. This increase in length of half-yearly reports is similar to what happened when the length and complexity of annual reports increased due to the introduction of IFRS in 2005.

KPMG accounting partner David Little-ford said the challenge for companies is to ensure that greater length translates into better quality reports. “The flexibility to present more focused disclosure in half-yearly financial reports than in the longer annual financial statements make it essential that companies devote the necessary effort to preparing this important element of their communication cycle,” he said.

He warned that UK companies should be prepared to make more disclosures in half-yearly reports than in the past. “Given that the deadline for publication is down from 90 days to two months, this may need careful planning,” Littleford advised.

The new half-yearly reports include an interim management report and a condensed financial statement. They also feature a narrative section on financial information that is supposed to provide a fair review of the important events of the past six months, as well as a focus on the future. 

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy


Thank you for subscribing to International Accounting Bulletin