Losing the excess baggageReducing disclosures in financial statements to what’s important
In October last year the International Accounting Standards Board (IASB) asked the Institute of Chartered Accountants of Scotland (ICAS) and the New Zealand Institute of Chartered Accountants (NZICA) to undertake a joint project to review the volume of disclosure requirements in International Financial Reporting Standards (IFRS). This move was in response to criticism by some of the effect of increasing detail in financial reports, and suggestions that the utility of financial reports is being impaired by unnecessary detail.
An Oversight Group comprising representatives appointed by the two Institutes, supported by technical staff, was established and has considered the issues and prepared a report to the IASB setting out its recommendations. The Group has presented its report Losing the excess baggage - reducing the disclosures in financial statements to what's important (PDF, 1.4MB), to the IASB in the form of a discussion paper. Following the Group's detailed review of financial reporting standards the paper recommends enhancing the use of materiality in financial reporting disclosures, and deletion of many disclosure requirements that do not contain material information. It is expected that later this year the discussion paper and its recommendations will be issued by the IASB for exposure and comment.
The discussion paper can be downloaded below and is now available for your consideration and feedback. I strongly encourage you to read the paper as it gives sound and practical perspective on a growing issue for the profession. NZICA is strongly in favour of the recommendations that remove unnecessary detail, and enhance the usefulness of financial statements; we’d very much like to hear your thoughts also. Reaction to the recommendations will likely have an influence on how the recommendations proceed.
Over the next few months we will update you on progress and response to the recommendations included in this report, the September Journal will include a detailed piece from Oversight Group member Kimberley Crook on the implications of the Group’s proposal, and we will continue to update this section of the website.
My sincere thanks to the New Zealand members of the Oversight Group for their commitment to the development of this thought provoking paper.
- Tony Frankham, professional company director, NZICA past President – joint Chair
- Lyn Provost, Auditor-General
- Kimberley Crook, Partner, Ernst & Young, and Member of NZ Financial Reporting Standards Board
- John Hames, Group Controller, Fletcher Building Limited
- Patricia McBride, Director – Accounting Standards, External Reporting Board.
Terry McLaughlin FCA
Chief Executive, NZICA
Download the paper (PDF, 1.4MB)
How to feedback
We welcome your feedback on the perspective and recommendations within the discussion paper. Please email your thoughts to firstname.lastname@example.org or submit written feedback to Rebecca Ingram at NZICA, PO Box 11342, Wellington.