The Financial Reporting Council (FRC) in the UK issued a report which examines the steps that companies have taken towards Clear & Concise reporting. The FRC’s Clear & Concise initiative is a programme of activities aimed at ensuring that annual reports provide relevant information for investors. The initiative is part of the FRC's on-going programme to address some of the common criticisms about the quality of communication in annual reports such as the use of boilerplate or disclosure of immaterial information.
The report highlights emerging best practice in narrative reporting following the introduction of the strategic report and considers developments in the reporting framework. The report is in three sections:
- Clear & Concise reporting: this section provides an overview of the current reporting landscape. It considers feedback from investors and companies on the impact of recent developments. It examines how communication can be improved and some of the perceived barriers to Clear & Concise reporting can be overcome;
- The second section studies the impact of the strategic report examines developments in the usefulness and relevance of narrative reporting since the introduction of the strategic report and the FRC’s Guidance on the Strategic Report. It investigates how narrative reporting has evolved and how it can continue to evolve. The study consists of an analysis of recent research of quality of the strategic reports, supplemented with a detailed review of a small sample of strategic reports.
- The final section considers emerging developments in reporting.
To assist companies ahead of the reporting season the FRC also wrote to audit committee chairs in larger listed companies in December, summarising key developments for 2015 annual reports.