The average length of financial statements has been growing for many years, as a result of new Standards and Amendments published by the IASB. In the coming years, new Standards on revenue, financial instruments and leasing will add even more disclosures.
All this increases the burden on you when preparing financial statements. Disclosures are added for good reasons – they enable investors to understand complex transactions within the financial statements. However, as a result financial statements are becoming cluttered and the truly important information is hard to find.
The Standards are only one issue – companies are struggling to apply the materiality concept to their disclosures. This lack of clarity of how to apply materiality to financial statements is perceived to be one of the main drivers for overloaded financial statements.
With support from regulators and standard setters, many companies are revising their approach to financial statement preparation – and looking for innovative ways to improve the look and feel of their financial statements. Companies are remembering that financial statements are not merely a compliance document but also a critical communication with investors.
From the collective experience of both Grant Thornton International Ltd IFRS team and member firm IFRS experts, we have published ‘Telling your story’, which explains and illustrates four key tools you can use to make your financial statements an effective communication tool