Hans Hoogervorst, Chairman of the IASB, outlined plans to prioritise improvements to the communications value of financial statements as the main outcome of the IASB’s recent Agenda Consultation.
Speaking at the IFRS Foundation's annual European Conference—held in Zurich, Switzerland—Mr Hoogervorst stated that the completion of several big IFRS Standards now allows the IASB to focus its efforts on increasing the communication effectiveness of financial statements. He intends to prioritise the theme of 'Better Communication' during his second term as Chair, which commences tomorrow, 1 July 2016.
Mr Hoogervorst said:
Valuable information gets drowned out by ‘tick the box’ disclosures and voluminous, but poorly organised and presented, financial statements. For the investor, it is often difficult to see the woods through the multitude of information trees. We will take a fresh look at how financial information is presented, how it is grouped together, and in what form it is made available.
'Better Communication' will bring together a number of work streams, including:
Primary Financial Statements—improving the organisation and structure of the ‘face of financial statements’ (statements of financial position, financial performance and cash flows);
Disclosure Initiative—improving the quality and usefulness of financial disclosures through amendments;
Financial Instruments with the Characteristics of Equity (FICE)—clarifying the definition, presentation and disclosure requirements for such instruments;
Digital reporting—further developing the IFRS Taxonomy to ensure it meets electronic reporting needs and remains fit for purpose; and
Non-financial reporting—assessing strategic challenges and exploring any potential future role that the Board may play in this area.
'Better Communication' as a theme for the Board's work responds too much of the feedback received through the 2015 Agenda Consultation, and should deliver material improvements to users’ ability to make economic decisions from financial information.
Mr Hoogervorst also announced that the IASB will be playing a more active role in supporting jurisdictions in the implementation of new and existing IFRS Standards.
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