Preparing a clear, concise financial reporting

Most of the organisations now-a-days face financial reporting problem for presentation in the financial statement as it is important to maintain proper reporting quality, maintain local and international guidelines. Financial reporting is equally crucial for company as well as investors or ordinary share holders. The UK Financial Reporting Council's (FRC's) Financial Reporting Lab (Lab) has published an insight report "Towards Clear & Concise Reporting" that highlights progress made by companies towards producing more relevant and succinct annual reports and accounts, and provides practical ideas on how companies can make further progress.
The first part of the report looks at examples of what companies have done to aid clarity and conciseness including
* Thinking about communication channels for instance by targeting financial reports to match specific users' needs e.g. moving breakdowns of sales and space data for retailers which are principally of interest to analysts outside of the annual report,
* Thinking about content - reporting on actions rather than just processes, focusing on material items within the annual report, reviewing the level of detail provided, removing standing information and placing it on company websites,
* Thinking about materiality, relevance and quality of disclosures and
* Thinking about layout to present a more logical flow, reduced duplication and a more user friendly experience.
Change programmes are something that most of us have some experience of but in the second part of the report the Lab provides observations on the process of change reflecting the experiences of those who have undertaken a process of corporate reporting improvement.  The Lab suggests a four step process - plan, manage, do and evaluate:
* Plan the change: Build momentum, get leadership from the top of the organisation and decide on the scope,
* Manage the process: Identify who will make the changes, set targets and get agreement from the board,
* Do what is needed: Start with a blank piece of paper, ensure that changes in business and regulation are reflected and make sure that the auditors are included in discussions and
* Evaluate the process: Debrief early, ask for feedback from investors and reflect how to make improvements continuous.
The report concludes with nine characteristics of good corporate reporting, originally set out by the UK Financial Reporting Review Panel in 2011 and 2012.  The panel believes that a good set of reports and accounts should:
* Tell a single story - consistency between the narrative section and the financial statements;
* Disclose how money is made - clear explanation of business model;
* Discuss what worries the board - disclosed risks and uncertainties are those discussed at board meetings;
* Be consistent - highlighted, adjusted or non-GAAP key performance indicators are clearly reconciled to the financial statements;
* Cut clutter - important messages are highlighted and not obscured by immaterial detail;
* Use clear language - avoiding jargon and boiler-plate disclosures;
* Summaries - appropriate levels of aggregation are used;
* Explain change - significant changes from prior periods are properly explained; and
* Be true and fair - the spirit as well as the letter of regulation is followed.
Financial reporting is a structured representation of financial positions and performance of an entity. The objective of financial reporting is to provide information about financial position, performance and cash flows of an entity that is useful to a wide range of users in making economic decisions.
Financial reporting also shows the results of the management's stewardship of the resources entrusted to it.

The writer, a banker, works in the Treasury Division, Rupali Bank Limited, Dhaka.
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