Hans Hoogervorst, Chairman of the International Accounting Standards Board), has outlined plans to prioritize improvements to the communications value of financial statements as the main outcome of the Board’s recent Agenda Consultation.
Speaking at the IFRS Foundation's annual European Conference—held in Zurich, Switzerland—Hoogervorst stated that the completion of several big IFRS Standards now allows the Board to focus its efforts on increasing the communication effectiveness of financial statements. He intends to prioritize the theme of 'Better Communication' during his second term as Chair, which commenced 1 July 2016.
“Valuable information gets drowned out by ‘tick the box’ disclosures and voluminous, but poorly organized and presented, financial statements,” says Hoogervorst.
“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 organization 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.
Hoogervorst also announced that the Board will be playing a more active role in supporting jurisdictions in the implementation of new and existing IFRS Standards.