FRC calls for a ‘better, not more’ approach to annual reports

November 2, 2023

The UK Financial Reporting Council releases guidance to help companies produce annual reports that take a more strategic approach to assessing materiality.

The UK Financial Reporting Council (FRC), as part of an effort to spearhead "decision-useful" corporate reporting that values quality over quantity, has released a series of reports focused on materiality.

"Companies use materiality to decide what to include and exclude in corporate reporting. It provides a lens to consider the amount and depth of information needed," the FRC wrote on its website while introducing the series of resources. "As reporting requirements grow, materiality must become a powerful tool to ensure disclosures remain relevant and provide decision-useful information to investors."

The first report in the four-part series, Materiality in Practice: Applying a Materiality Mindset, aims to spell out how organisations, while complying with regulatory requirements, can "report clearly and in a compelling way on those issues that the board and management team deem to be of the greatest importance to stakeholders".

The FRC acknowledges that ever-increasing regulatory pressures, much of them related to sustainability matters, have taxed reporting organisations and led to extra obligations that have created unwieldly reports that can negatively affect both the reporting entities and investors researching their options.

[Financial Management Magazine]