UK Financial Reporting Council Releases Disclosure Related Paper
The FRC has issued a discussion related paper on improving disclosure in finance reporting. The FRC stated that through the discussion related paper its objective is to give a direction to the International Accounting Standards Board before it begins its disclosure framework project. The discussion related paper also identifies a few points for the board. The United Kingdom Financial Reporting Council noted that the discussion related paper completes another paper which the board had jointly issued with EFRAG and ANC in the month of July in 2012.
Contradictory to the narrow aim of the ANC/FRC/EFRAG paper, the Financial Reporting Council’s paper lays down the thoughts of FRC on the manner in which the disclosure framework may be applicable in a broad context, especially with regard to placement related criteria, which as per FRC’s opinion are an important aspect of disclosure structure. In this process, the discussion related paper also places a lot of emphasis on ‘financial reporting’ and considers placement criteria as offering a structure for the finance related report to ensure that the disclosure framework are well organized in a manner that is extra informative for the reader and could be applied consistently.
The paper reinstates the problem related to disclosure and it further describes both the quality and quantity related problems. The paper clarifies that this problem gives rise to disclosures which are related more to compliance in comparison to communication. The discussion related paper also states that disclosure related framework is essentially an organized framework, which brings together the different aspects of finance reporting that are related to disclosures. It is within this framework that standard setting professionals and regulators is able to set the requirements related to disclosure and auditors as well as prepares are able to apply these requirements easily. The discussion paper also lays down some advantages of creating a disclosure related structure. It states that the framework will ensure that the regulators add disclosure only to finance related reports so that those very disclosures match the finance reporting objective. The framework will reduce the burden related to disclosures that arise as a result of disclosure related requirements. In addition to this the framework will also result in getting rid of duplicate data and information from the finance related reports.