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August 15, 2014

UK FRC calls for ‘clear & concise’ reporting

By Steffen Müller

FTSE 350 companies reports are getting thicker despite some companies taking steps towards more concise reporting a UK Financial Reporting Council’s (FRC) Financial Reporting Lab (Lab) revealed.

The report, Towards Clear & Concise Reporting, reviewed the annual reports of 41companies of the FTSE 350 and found that the average page count of these reports had increased by 10%. In the FTSE 100 the average page count increased by 9% and by 15% for the FTSE 250.

"The increase was a result of companies implementing the new remuneration reporting requirements introduced by the government last year," the report read.

However the FRC Lab report also found that some of the FTSE 350 companies have already taken steps towards more concise reporting, including the removal of irrelevant or too detailed information in the financial reviews and statements and the improvement of the reports’ layout and user targeting.

The FRC Lab report was issued as part of the UK watchdog recently launched Clear & Concise initiative which aims to provide companies with an opportunity to rethink aspects of the annual report and innovate.

The recent publication calls on companies to remove immaterial disclosures and to reconsider the communication channels used to match the needs of the corporate report users.

FRC Lab director Sue Harding said: "The FRC’s Clear & Concise reporting work seeks to promote reporting from which investors can, with justifiable confidence, draw conclusions about a company’s performance, position and prospects."

Now is an ideal time for companies to think about how to take steps to make their next annual reports clearer and more concise, she continued. "This Lab insight report provides examples of how companies are actively working to improve their annual reports and accounts and identifies some questions companies may wish to address."

Related links:

UK FRC

Lab report: Towards Clear & Concise Reporting

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