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The future of narrative reporting - Draft regulations published in the UK

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18 Oct 2012

In an effort to make narrative reporting simpler, clearer and more focussed, the UK Department for Business, Innovation and Skills (BIS) has published draft regulations for narrative reporting in the UK.

The draft regulations are the UK government's response to a consultation on narrative reporting that was launched in September 2011.

In comparison to existing UK requirements and the proposals put forward in the 2011 consultation the key points of the draft regulation are:

  • A separate strategic report replaces the business review and includes some extra content for quoted companies concerning the business model, human rights and diversity. The requirement about details of essential contractual arrangements is dropped.
  • The directors’ report is retained largely unchanged except that it now excludes the content which is in the new strategic report.  A handful of other requirements have been dropped.  The original proposal for an Annual Directors’ Statement to replace the directors’ report and be made available online has been dropped.
  • Shareholders who currently receive only the summary financial statement will in future receive the strategic report instead.  That is quite a significant change as it replaces a summarised P&L and balance sheet with what is essentially a narrative discussion about the company’s strategy and performance.

Please click for access on all relevant documents (September 2011 consultation to October 2012 government response) on the BIS website.

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