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The Financial Reporting Council (FRC) together with the European Financial Reporting Advisory Group (EFRAG) and the Autorité des Normes Comptables (ANC), have published a discussion paper Towards a Disclosure Framework for the Notes.
The paper – for which comments are invited until 31 December 2012 - was borne out of growing concerns that the volume of notes to the financial statements had swelled enormously over the years as the International Accounting Standards Board (IASB) added to existing IFRS disclosure requirements.
The organisations said financial statements had ‘become a real burden’ and it was not clear that ‘they serve their intended purpose which is to help users understand the numbers in the financial statements’.
The proposals set out a decision framework for both the standard setter in setting the requirements and for preparers, auditors and regulators in applying the requirements, stressing the need to improve communication to investors, creditors and relevant others.
A spokesman for the three groups, said: ‘The work ahead is challenging for all involved. It is hoped that the discussion paper leads to a constructive debate within Europe and elsewhere and all that have an interest in more effective and streamlined disclosures in financial reporting are strongly encouraged to respond to the invitation for comments.’
The discussion paper can be downloaded from the FRC website FRC
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