IASB calls for ‘new approach’ to communication in financial statements

The International Accounting Standards Board (IASB) is calling for public comments as part of its proposal to develop disclosure requirements in International Financial Reporting Standards (IFRS).

According to the board, the proposed changes would allow companies to “enhance their judgement” and provide investors with more useful information.

Going forward, the new approach has been written as draft guidance for the board’s use when developing these changes.

When applying said guidance, the IASB plans to expand investor engagement to make sure the Board has an in-depth understanding of investors’ information needs, give greater focus to the objective of disclosure requirements, and minimise requirements to disclose certain items of information.

Before implementing any changes, the IASB is seeking stakeholder feedback to inform the proposed “new approach” and new amendments to the IFRS, which would help companies communicate more effective information to investors.

Hans Hoogervorst, chair of the board, said: “We believe this new approach to developing disclosure requirements in IFRS Standards can serve as a catalyst to improving information to investors; however, real improvements can only be achieved if all those involved—companies, auditors, regulators and investors—work together.”