On 17 December 2015, the FRC issued a report entitled "Clear & Concise: Developments in Narrative Reporting." The report focuses on the steps that companies have taken to achieve clear and concise reporting where annual reports provide relevant and easily understandable information for investors. The report highlights emerging best practice in narrative reporting and offers investor and company perspectives on processes that aid improvements in annual reports.
The report focuses on three areas:
- Clear and concise reporting – The FRC includes a description of what this term means and how companies can aim to achieve it;
- Impact of the strategic report – The FRC states that strategy reporting provides useful insights into how a company is managed. The report generally finds that the overall quality of corporate reporting has been improved by the use of the strategic report although opportunities for further improvement still exist (for example, there is scope for companies to take a longer-term view in their strategic reports); and
- Emerging developments – The report discusses a number of developments that will soon be enforced that will have an impact on corporate reporting in the future including, for example, new disclosure requirements.
The report also highlights focus areas for the next reporting period such as the application of materiality and improving reporting of key performance indicators, principle risks and forward-looking information.
The report can be accessed at: https://www.frc.org.uk/Our-Work/Publications/Accounting-and-Reporting-Policy/Clear-Concise-Developments-in-Narrative-Reporti.aspx
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