FRC PUBLISHES LAB REPORT ON ACCOUNTING POLICIES AND INTEGRATION OF RELATED FINANCIAL INFORMATION

The Financial Reporting Council’s (FRC) Financial Reporting Lab has published a report on ‘Accounting policies and integration of related financial information’, which provides valuable insight for companies on what investors want from accounting policy disclosures and where they should appear in financial statements.

16 companies, 19 institutional investor and analyst organisations, and over 200 retail shareholders took part in the Lab project. This report is a further contribution to the FRC’s programme of work to promote Clear & Concise reporting from which investors can, with justifiable confidence draw conclusions about a company’s performance, position and prospects.

Sue Harding, Director of the Financial Reporting Lab, said:

“For significant accounting policies, investors want improved disclosure that avoids boilerplate text by being specific to the company and providing sufficient detail to understand how the company accounts for its transactions. They are also keen to gain a better understanding of the impact of judgement and estimation on the reporting of a company’s results and financial position. Their suggestions support Clear & Concise reporting."

The Lab report includes examples of current good practice as well as highlighting how disclosure could be modified to provide the most value to investors in the future.

A copy of the report can be downloaded from the FRC website:
https://www.frc.org.uk/Lab/published-project-reports