ICAEW report on non-comparable disclosure under IFRS

The Institute of Chartered Accountants in England and Wales (ICAEW) has released a report 'Disclosure quality and international comparability under IFRS: evidence from pension discount rates, impairment and capitalisation of development costs' that argues that non-comparable disclosure under IFRS is a problem.

The report is addressed to practitioners such as financial analysts, finance directors, audit partners and IFRS technical departments in audit firms to alert them to the findings of an investigation into international differences in IFRS practice. Data was collected from over 500 firms in 15 countries.

Of the three areas investigated (pension discount rates, impairment charges and capitalisation of development costs), the topic with the largest amount of non-comparable disclosure was pension discount rates: only 67% of financial statements examined were found to be comparable for analysis. The authors note that pension discount rates were often not distinguished by country and were disclosed as a relatively wide range. Additionally, although an IFRS requirement, many companies do not provide comparable disclosure on the duration of the pension obligation. The authors sum up their findings:

This is an issue of non-comparable disclosure under IFRS. The severity of the problem varies by country, but as a data problem it should be of interest to analysts. Some of the thinness in disclosures may be due to immateriality but we suspect some non-compliance with IFRS disclosure requirements, which should concern auditors, the IASB and regulators.

The full report can be found on the ICAEW website.

Comments

IFRS FOUNDATION PUBLISHES CASE STUDY REPORT: BETTER COMMUNICATION—MAKING DISCLOSURES MORE MEANINGFUL

The IFRS ® Foundation has published a case study report showing how companies from different parts of the world have improved communication in their IFRS financial statements. Better Communication in Financial Reporting—Making disclosures more meaningful contains six case studies from varied industries. Its aim is to illustrate how improvements can be made and inspire other companies to initiate their own improvement projects. The report explains the process these companies have gone through to improve disclosures in the notes to their IFRS financial statements and shows examples of the improvements made. By identifying what information is relevant, prioritising it appropriately and presenting it in a clear and simple manner, they have made their financial statements easier for investors to read and understand. Through the use of examples, the report shows that relatively small changes can significantly improve the quality of the financial information that compa...

Explore more »

List of IFRIC Interpretations

The IFRS Foundation provides free access (through Basic registration) to the PDF files of the current year's IFRIC ® Interpretations (Part A of the Issued Standards—the Red Book), as well as available translations of Interpretations. This section also provides high level and non-technical summaries for the Interpretations. The full Standards with all accompanying documents are available for Premium subscribers on eIFRS . For more information about what is provided for free and why, visit our unaccompanied Standards FAQ page . Interpretation name IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments IFRIC 4 Determining whether an Arrangement Contains a Lease IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds IFRIC 6 Liabilities arising from Participating in a S...

Explore more »

IFRS Foundation Trustees publish findings on independent perception research

The Trustees of the IFRS ® Foundation, responsible for the governance and oversight of the International Accounting Standards Board (Board), today published the findings of independent research commissioned to better understand stakeholder attitudes towards the work of the IFRS Foundation and the Board. The research found that the IFRS Foundation is perceived as being successful in achieving its public interest mission, and is highly rated for transparency, independence and professionalism. The research also identifies areas for further development, mainly around the complexity of its Standards, the timeliness of its standard-setting process and the need to respond quickly in a changing world. The research was conducted between February and May 2017 by Ebiquity, an independent research agency. Ebiquity interviewed 50 senior stakeholders from around the world. That research was then supplemented with online surveys of members of the IFRS Foundation’s advisory bod...

Explore more »

neoaccounting

Search This Blog