By Daniel Hunter
Deloitte’s latest survey of annual reports shows that many companies are already embracing new strategic report measures well ahead of their mandatory implementation.
The year ahead sees the old business review format making way for a new strategic report which has only just come into effect for 30 September 2013 year-ends.
Nearly half (42%) are already disclosing some limited numbers on greenhouse gas emissions, while 21% are providing employee gender diversity figures. Risk and uncertainty reporting is maturing, with 83% clearly disclosing principal risks and 91% discussing mitigating activities. Encouragingly, only 5% were judged to have only provided a ‘boilerplate’ list of principal risks and uncertainties.
Veronica Poole, UK national head of accounting, said: “It is encouraging to see many companies making real efforts to tell their story and bring the numbers in their financial statements to life. In going above and beyond the requirements and implementing changes ahead of schedule, companies see the annual report as much more than just a compliance exercise.”
Companies did however fall down in their quest to make their reports truly integrated for stakeholders and shareholders. Only 28% linked all parts of the annual report, although this was an increase of 14% from last year.
"There are many changes facing reporters this year, including the new strategic report, increased reporting by audit committees and significantly changed directors' remuneration reports; some of these are complex and companies will need to be alert to stay one step ahead. But as the results of the survey suggest, for the best reporters that already communicate effectively with stakeholders embracing the changes will be more of an evolution than a revolution", said Poole.
Compared to narrative reporting arena, there was no appetite for early adoption of new accounting standards or amendments. The numbers themselves revealed that impairments are still a big issue, with 80% of companies reporting such losses. On perhaps a more positive note, the level of acquisition activity was seen to be on the increase, with 39 companies reporting business combinations, compared to 31 in the previous year.
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