Clutter in annual reports is a problem, obscuring relevant information and making it harder for users to find the salient points about the performance of the business and its prospects for long-term success.

The report provides preparers of annual reports with practical aids for reducing clutter, giving ideas for how disclosures might look without the clutter and factors to consider when planning the annual report process.

However, it’s not just preparers that can cut clutter. All of those involved in regulating, reviewing, preparing and using annual reports have to change their behaviour if clutter is to be removed and corporate reporting improved. The Government will be consulting further on the framework of narrative reporting, and the FRC will coordinate its work with that. Further debate is sought on how materiality should be applied to financial statement disclosures.

The ASB hopes that the report will stimulate debate and action on this issue, and welcomes any comments by 30 September 2011. It plans to follow up on this work in the autumn.

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