IASB calls for behavioral change regarding disclosure.
The International Accounting Standards Board (IASB) published a Feedback Statement summarizing the discussions at a forum hosted by the IASB on financial information disclosure titled Discussion Forum--Financial Reporting Disclosure. IASB also signalled its desire to serve as a catalyst for collective action by preparers, regulators and the accounting profession.
In January 2013, IASB hosted a public forum to foster dialogue between all stakeholders in financial statements and the IASB about how to improve the usefulness and clarity of disclosure. Representatives of these stakeholders groups debated the factors that have contributed to increased volume of financial information disclosures and a perceived reduction in the quality and usefulness of those disclosures. Discussions among participants indicated a broad consensus that collective action was required for improvements to be made.
The feedback statement summarizes those discussions as well as recommended actions resulting from them. Regarding its responsibilities, IASB intends to take action in three main areas:
1. Amendments to IAS 1: IASB will make narrow scope amendments to IAS 1 Presentation of Financial Statements to address perceived impediments to preparers exercising their judgement in presenting their financial reports.
2. Materiality: IASB will seek to develop educational material on materiality with input from an advisory group.
3. Separate Project on Disclosure: IASB will consider as part of its research agenda the broader challenges associated with disclosure effectiveness.
IASB Chairman Hans Hoogervorst said in a statement: "Many organizations have written useful reports about ways to address problems with financial information disclosures. It is undoubtedly true that we and others can improve our requirements to alleviate some of the difficulties. However, material improvements will require behavioral change to ensure that financial statements are regarded as tools of communication rather than compliance. That means addressing the root causes of why preparers may err on the side of caution and 'kitchen-sink' their disclosures."
The feedback statement, he added, "describes our ambition to serve as a catalyst for leading that change."
The statement is available for download from the International Financial Reporting Standards (IFRS) website at www.ifrs.org.
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|Title Annotation:||FINANCIAL REPORTING; International Accounting Standards Board|
|Article Type:||Conference notes|
|Date:||Jul 1, 2013|
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