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ICAS/NZICA disclosure report – Education session

Date recorded:

The Boards hosted a presentation by the Institute of Chartered Accountants of Scotland (ICAS) to provide the results of their joint project with the New Zealand Institute of Chartered Accountants in which they conducted a study on reducing disclosures in financial reporting. Those standards in the scope of this project included IFRSs 1, 2, 3, 5, 6, 7, and 8 and IASs 1, 2, 7, 8, 10, 12, 16, 19, 20, 21, 23, 24, 29, 33, 36, 37, 38, 40 and 41.

The study started with a review of the conceptual framework. Their recommendations include:

  • adding a disclosure principle where one did not exist
  • deleting those disclosures that are 'encouraged'
  • replacing many detailed reconciliations with a summary of material changes
  • removing unchanged accounting principles from financial statements and instead reference to website or other location
  • emphasise materiality throughout and using 'not material' rather than 'immaterial'.

The group estimates that there recommendations would result in an overall 30% reduction in the number of pages in the financial statements. They suggested the Board package the report as an outreach document to solicit constituent feedback.

The Boards commended the group for their efforts. Some of the Board members were supportive of the groups' recommendations while other Board members (particularly representatives of the user community) expressed reservations with the proposals, in particular the removal of the account reconciliations. The IASB Chairman said the Board would discuss how to proceed with the report at a future Board meeting.

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