Tier 1 and Tier 2 For-profit Entities Better Communication in Financial Reporting
As part of its work on Better Communication in Financial Reporting, the International Accounting Standards Board (IASB) has issued Discussion Paper DP/2017/1 Disclosure Initiative—Principles of Disclosure. The Discussion Paper (DP) proposes disclosure principles that can be used to improve the communication of information in financial statements.
The DP seeks feedback on disclosure issues that the IASB has identified, as well as preliminary proposals to resolve these issues.
Through outreach, the IASB identified three main concerns about information contained in financial statements, which are:
- not enough relevant information;
- too much irrelevant information or disclosure overload; and
- ineffective communication of information.
The IASB believes that the development of clear principles governing what, how and where information should be disclosed in the financial statements will improve the information provided to users of financial statements.
The DP also seeks feedback on an approach that has been developed by the staff of the New Zealand Accounting Standards Board (NZASB) for drafting disclosure objectives and requirements in IFRS Standards.
Ultimately, it is expected that the DP could lead to amendments to IAS 1, the Standard covering general disclosure requirements, or the development of a new general disclosure Standard. The DP could also lead to the development of supporting guidance/education material.
The DP is relevant for Tier 1 and Tier 2 for-profit entities. It is also relevant to auditors, regulators and other interested parties that are involved in financial reporting.
We will be holding outreach events in the near future. Please watch out for a separate communique with details of these events.
Your view is very important to us. Comments may be made in an e-mail or a letter.
You can send comments on the DP to the NZASB by 18 August 2017, or send comments directly to the IASB by 2 October 2017, with a copy to the NZASB.
Further information is available from the XRB website