24 April 2013

EFRAG: Feedback statement on the Disclosure Framework Discussion Paper

The DP addressed ways to clarify the purpose of the notes; develop principles to define what information should be included in the notes; consider the form in which disclosure requirements are set; strengthen the application of materiality; and articulate the key features of effective communication.

Respondents to the DP were in agreement that immediate action is needed to address the quality of disclosures in financial statements. Further, respondents supported the proposal in the DP that a more consistent and rational approach to disclosures should be developed. It was also agreed that the disclosure burden is a shared responsibility and standard-setters need to work with others (including regulators and auditors) to improve disclosures.

With regard to the causes of the disclosure problem, it was suggested that further debate may be needed to conclude if the root cause are conceptual or an application problem.

There was shared support for the Key Principles, and it was agreed that defining the purpose of the notes was an important step to identify what was relevant information.

In relation to users’ needs and the use of indicators suggested in the DP to assist standard-setters in assessing what disclosure requirements are appropriate, there was no clear consensus from respondents about the best way forward. Although there is a general call for simplifying the disclosure requirements.

There was agreement from respondents to the proposal in the DP that guidance would be helpful to improve the application of materiality.

The DP proposed that focusing on communication rather than compliance would improve disclosure and suggested some communication principles. There was support for the communication principles and agreement that there should be a shift away from mere compliance.

Press release

Summary of comments

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