Half-year reports are set to be longer - KPMG

Half-year reports for UK companies look set to be longer and filled with greater narrative disclosure, as they comply with a pending requirement of accounting standard, IAS 34.

According to KPMG, which assessed German companies who already complied with the new rule and at six UK examples, the length of reports ranged from 11 to 24 pages for UK companies and 20 to 86 pages for German companies.

The new reports contain both a narrative interim management report and a condensed set of financial statements.

The narrative section is an opportunity for the company to explain the financial information, and must give a fair review of the important events in the first six months of the financial year. It is also required to be forward-looking, describing the principal risks and uncertainties in the remaining six months.

KPMG partner, David Littleford, said the challenge is for companies to make sure that 'more translates into better.'

'The flexibility to present more focused disclosure in half-yearly financial reports than in the longer annual financial statements make it essential that companies devote the necessary effort to preparing this important element of their communication cycle,' said Littleford.

UK companies will also have the new challenge of a shorter deadline for publication of a greater amount of information.

'Given that the deadline for publication is down from 90 days to two months, this may need careful planning.

'Disclosures can be very specific to the events and circumstances of the entity so some variation in practice is to be expected. However, UK companies should be prepared to make more disclosure than has historically been given in half-yearly reports,' said Littleford.