Interim standard sees reporting burden soar

Corporates have been made to escalate their reporting efforts after IAS 34
interim demands became compulsory in 2007, with the average length of the
half-yearly financial report up by 27%.

‘A question has to be asked whether all the new rules were required in the
first place,’ said Deloitte audit partner Isobel Sharp.

has been monitoring the situation closely since the rules came into force for
reporting starting on or after 20 January 2007.

‘The UK Listing Authority issued the new rules in late December 2006,
effective for periods beginning on or after 20 January 2007. The results suggest
the notice was not adequate and perhaps over a year should be allowed, with
early adoption permitted so that precedents can be set for others.’

Previously, the optional standard was bypassed by most corporates because
compliance meant they could expose themselves to extra disclosures on estimates
which changed significantly between interim and annual reports.

Many companies used to drop parts of their interim statements to avoid the
extra disclosure.The situation appears to be even more acute because a large
number of companies are still not providing required information, despite the
surge in report length.

Of 289 companies surveyed, 25% failed to provide a responsibility statement
in their half-yearly reports, which is now a requirement for all listed

Sharp added: ‘A quarter of companies did not include the new responsibility
statement, which was probably an oversight caused by unfamiliarity with the
rules. But is this rule a necessity or a nicety?’

Deloitte’s review considered the impact of the EU Transparency Obligations
Directive, which introduced more detailed and extensive requirements for
half-yearly financial reports, including compliance with IAS 34 and shorter
reporting deadlines.

Of 30 companies put under even closer scrutiny, 30% did not comply with the
requirements of IAS 34 fully. This was mainly due to missing disclosures on
segments, accounting policies and earnings per share.

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