Cutting the clutter in financial reports

Financial reports are increasingly lengthy and complex – reducing your ability to effectively communicate how your business is performing.

Even sophisticated readers can find it difficult to understand accounting jargon and identify important disclosures, including whether key financial measures have even been reported.

Typically, this involves removing non-essential material and irrelevant disclosures, re-ordering and re-labelling accounting policy and detailed notes to better reflect key financial measures and using plain English while still fully complying with relevant accounting standards and regulatory requirements.

• Better alignment of messages/results reported to stakeholders
• Improved internal communication and understanding of the financial report
• Reduced length of the annual report, saving management time and report production costs.

The end product is a simplified, sharper and more relevant financial report that is easier to understand.

For those entities evaluating the pathway to Integrated Reporting, cutting the clutter is a first logical step in improving the clarity of reporting to the capital markets and stakeholders.

Both the International Accounting Standards Board and Australian Accounting Standards Board have been active in promoting the importance of preparing less complex financial reports that focus on those disclosures that are material to the entity. ASIC have also publicly stated that it only focuses on those disclosures that are material to the financial report.

KPMG can help you streamline your financial reports by providing:

• thought leadership and examples of de-cluttered disclosures
• feedback on draft de-cluttered financials
• management and Audit Committees with insight on the best way to approach the de-cluttering process
• assistance in drafting de-cluttered financial reports and participating in project workshops and discussions.