FRC Intends To Filter "Impurities" In Annual Reports.

Recently, the United Kingdom Finance The report board (FRC) launched a campaign aimed at improving the clarity and transparency of annual financial reports, calling for the elimination of all damaging annual reports from public reports. quality Redundant text and data.

Britain accounting The Guidelines Committee (ASB) issued a report entitled "removing impurity: fighting impurities in annual reports". FRC said that the report would be a catalyst for changing the way the annual report was compiled.

FRC said that the "impurity" level in the annual report has become a "stubborn disease", which has blocked the relevant information, which makes it difficult for users of annual reports to see the focus and long-term success prospects of business performance.

FRC defines "impurities" as two kinds of minor details, that is, "non major disclosures" and "years of constant formulaic explanations". It is considered that "behavioral impact" is one of the reasons why there are so many "impurities" in annual reports. In this regard, the regulatory bodies, accounting standards making bodies and annual report makers, as well as those who can influence the annual reports, are to blame.

In the examples of "goodwill actions" cited by FRC, which cause too much information (annual reports), the guidelines of the England and Welsh Institute of Chartered Accountants (ICAEW) on "importance" (FRC believes that the current focus of the guide is what is included in the annual report, rather than what should be excluded), and the working guide of large accounting firms (FRC believes that such a guide will lead to the formation of an all inclusive annual report list) is among them.

In order to solve this problem, the ASB report provides practical help for the annual report to exclude "impurity", including corporate governance, accounting policies and stock payment templates.

At the same time, FRC also wants to take actions in the following three areas: to define "importance" from the perspective of disclosure; to consider ways to separate explanatory information from annual reports; and to initiate dialogue with stakeholders on what information they want to cover in annual reports.

ASB chairman Roger Marshall (RogerMarshall) said: "improving the quality of financial reporting is not just about issuing guidelines. We hope to encourage improvements in behavior so that annual reports can be clearly refined, and the focus of disclosure will really fall on the content that helps understand the business and its prospects."

ASB is seeking advice from the public on the report, which is due to be held in September 30, 2011.