LONDON, June 27 (Reuters) - A global accounting standard setter has pledged a bonfire of the boilerplates to rid annual company reports of unnecessary disclosures that confuse investors.
Hans Hoogervorst, chairman of the International Accounting Standards Board (IASB), said book-keeping rules will be changed to cut swathes through irrelevant sections of ballooning annual statements.
“The risk is that annual reports become simply compliance documents, rather than instruments of communication,” Hoogervorst said in a speech in Amsterdam on Thursday.
The 2012 annual report of HSBC runs to 546 pages, pipping RBS at 543 pages, with Barclays at a more modest 226 pages.
Since the financial crisis, regulators have been under pressure to shed light on the accounts of banks in particular. Hoogervorst set out a plan to ditch disclosures that are not “material”, with new guidance to define what is relevant.
The medium-term aim is a new disclosure framework for the IASB’s accounting rules, used in more than 100 countries, including in the European Union.
Britain’s Financial Reporting Council, which regulates accounting, has ticked off companies for listing every conceivable risk, making it hard to spot the important details.
The ACCA, a London-based accounting body, said a study it conducted with accounting firm Deloitte found the average length of annual reports of UK-listed companies rose by 56 percent between 1996 and 2010.
Hoogervorst, a former Dutch finance minister and markets supervisor, said even his “quick win” changes will have a big impact and remove most excuses for boilerplate disclosures.