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In their latest review of structure and effectiveness, from 2015 to 2016, the Trustees of the IFRS Foundation confirmed the current approach of the IASB to wider corporate reporting. Broadly, this approach is to cooperate with organisations like the Corporate Reporting Dialogue (CRD) and the International Integrated Reporting Council (IIRC).
The IASB was also asked to study further what its future role should be in the wider corporate reporting landscape. The IASB is examining this question now.
The IASB is not concerned that the relevance of financial reporting is under threat. First, because financial reporting is primarily—but certainly not exclusively— backward looking, it offers the most tangible evidence of a company’s performance. The income statement will remain the ‘hardest’ and most comparable source of information for investors.
Second, in the course of time, all value creation—also the focus of integrated reporting—will ultimately pass through the financial statements, although often with a considerable time lag. For these reasons, the financial statements will most likely remain the main anchor for investors and creditors in evaluating a company’s performance.
Nevertheless, the Board has always been aware that financial reporting in the narrow sense has its limitations. In the Conceptual Framework for Financial Reporting, the IASB acknowledges that general purpose financial reports are not designed to show an entity’s value and that users also need other sources of information to make their estimations.