Wednesday 17th November 2010 |
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The Securities Commission's latest review of financial reporting standards has highlighted the need for a greater focus on transparency.
"Ensuring stakeholders and investors are fully informed about all areas of their investment is vital, and issuers must ensure they provide clear, concise and transparent financial statements which are easily understood," said Securities Commission chairman Jane Diplock.
The Commission's Cycle 13 review focused on segment reporting, the standard introduced at the start of last year to ensure investors have a clear insight into an entity's operations and the information management uses to make operating decisions.
The Commission is concerned some disclosures do not meet the core principle of the standard and reminded issuers that the financial reporting standard requires a greater level of transparency than the previous standard.
This cycle looked at the financial statements of 20 companies with March 31 2010 balance dates and the Commission wrote to 16 of the assessed companies to raise 30 issues.
The latest results found an improvement in the level and type of disclosures relating to investment property revaluations, however some areas required better disclosure, particularly about operating segments, key judgments and significant assumptions and impairment relating to goodwill.
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