Response of the EAA FRSC to the EFRAG/ANC/FRC Discussion Paper: Towards a Disclosure Framework for the Notes

We summarise the response of the EAA’s FRSC to Towards a Disclosure Framework for the Notes, a Discussion Paper (DP) issued jointly by EFRAG, ANC and FRC. While supportive of much of the DP, and in particular of the underlying aim toplace disclosures on a sounder conceptual foundation, we identify two broad themes for further development. The first concerns the DP’s diagnosis of the problem, which is that the existing financial reporting is characterised by, on the one hand, disclosure overload and, on the other hand, an absence of a conceptual framework for organising and communicating disclosures. Our review of the literature suggests much greater support for the second of these two factors than for the first. The second broad theme is thepurpose of the proposed DF, and the principles that are derived from this purpose. Here, we stress the need for the framework to better accommodate the context within whichfinancial statement disclosures are used. In practice, this context is characterised by variation in information, incentives and enforcement, each of which has a considerableeffect on the appropriate disclosure policy and practice in any given situation.

Publication year:2013

Accessibility:Closed