'Better Communication in Financial Reporting' highlights the importance and common themes of a number of the International Accounting Standards Board's (Board) projects. These projects are designed to help make financial information more useful and improve the way financial information is communicated to users of the financial statements.
Investors have told the Board that because financial statements can often be poorly presented, it can be difficult and time-consuming for them to identify useful information. The Board wants to contribute to making communication of information in companies' financial statements more effective.
Hence, 'Better Communication in Financial Reporting' will be a theme underlying much of the Board's work for the next few years. The Board has identified a number of projects that it will develop to support better communication in financial reporting.
Projects focused on content of information
Disclosure Initiative—Accounting Policies
The accounting policies project is developing guidance and examples to help entities apply materiality judgments to accounting policy disclosure
Disclosure Initiative—Subsidiaries that are SMEs
This project is developing an IFRS Standard that will permit non-publicly accountable subsidiaries to apply IFRS Standards with reduced disclosure requirements, reducing preparation costs for subsidiaries and eliminating disclosures not targeted to the needs of users of non-publicly accountable entities.
Disclosure Initiative—Targeted Standards-level Review of Disclosures
The targeted standards-level review of disclosures project is improving the way the Board develops and drafts disclosure requirements in order to improve the usefulness of disclosures provided for the primary users of financial statements
The management commentary project is revising and updating the IFRS Practice Statement 1 Management Commentary by considering how management commentary provided outside the financial statements could better complement and support the financial statements
Primary Financial Statements
The Primary Financial Statements project aims to improve how information is communicated in the financial statements, with a focus on information in the statement of profit or loss.
Projects focused on delivery of information
The IFRS Taxonomy improves communication between preparers and users by enabling information in the financial statements and other information outside the financial statements to be delivered in an electronically readable format
Better Communication Case Studies
Illustrates how various entities have improved communication of information in their financial statements
Disclosure Initiative (Amendments to IAS 1)
Includes amendments designed to encourage entities to apply judgment in determining what information to disclose in their financial statements
Disclosure Initiative (Amendments to IAS 7)
Includes requirements to disclose changes in liabilities arising from the financing activities of an entity, including changes arising from cash flows and non-cash changes
Disclosure Initiative—Definition of Material
The definition of material project is improving the understanding of the existing requirements in IAS 1 and clarifying guidance to help entities make better materiality judgments
Disclosure Initiative—Principles of Disclosure
The principles of disclosure research project considered whether to develop new, or clarify existing disclosure principles. The Board plans to publish a summary of the research findings in due course