UK FRC believes the European Commission might be traveling in the wrong direction on non-financial reporting
08 Apr 2016
In January 2016, the European Commission launched a public consultation to collect views from stakeholders on non-binding guidance on the methodology for reporting of non-financial information by certain large companies across all sectors. The UK Financial Reporting Council (FRC) has reponded and warns that the proposed guidance might be too prescriptive.
Among the main concerns, the FRC notes that in developing the guidelines, the Commission could go beyond the principles in the corresponding directive and inadvertently introduce new disclosures. The FRC also believes that certain characteristics of the proposed guidelines could lead to boiler plate reporting or confusion - examples cited are:
- a comprehensive list of KPIs in the guidelines, which might encourage companies to include immaterial KPIs in their reporting; and
- an exhaustive list of all frameworks for non-financial reporting, that might exclude other frameworks that address similar issues or that go beyond the Commission's guidelines.
The comment letter states:
Any guidelines should be concise, principles-based and allow companies flexibility to tell their story. We do not support prescriptive guidelines as these can lead to boiler plate reporting as well as resulting in excessive detail that can obscure relevant information.
Please click to access the full comment letter on the FRC website.
