IASB Disclosure Initiative: Improving Communication of Financial Information

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BAO 3309 Research Assignment

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Executive Summary
The report is intended to analyze and examine the need for undertaking disclosure
initiative by IASB to improve the quality of financial information presented to the general users
of the financial statements. The disclosure problem faced by the IASB as illustrated within the
report includes lack of relevancy and ineffective communication that has caused the need for the
company to undertake a disclosure initiative. The IASB has mainly implemented amendments
within IAS 1 and IAS 7 as a part of the disclosure initiative as discussed within the report. The
context of the materiality and the concerns in relation to the structure of primary financial
statements has also been discussed within the report. The impact of the disclosure imitative on
the financial reporting process of the ASX listed companies has been illustrated in reference to
examining the financial statements of Wesfarmers Ltd.

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Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Part 1: Analysis of IASB Decisions for Undertaking a Project to Improve the Communication of
Existing Information........................................................................................................................4
Part 2: Major Concerns In relation to the Information Disclosure in Financial Statements............5
Part 3: IAS 1 and IAS 7 amendments as the part of disclosure initiative........................................6
Amendments to IAS 1: Presentation of financial statements.......................................................6
Amendment to IAS 7: Statement of cash flows...........................................................................6
Part 4: Impact of Materiality on the Presentation and Disclosure of Financial Information in
Relation of:......................................................................................................................................7
a) Context of the Materiality Assessment....................................................................................7
b) Immaterial Information............................................................................................................7
c) Aggregating and disaggregating information..........................................................................7
Part 5: Concerns Expressed about the Content and Structure of the Primary Financial Statements
and Addressed by IASB in reference to:.........................................................................................8
A) Roles of Primary Financial Statements and the Notes............................................................8
B) Use of Performance Measures in Financial Statements..........................................................8
Part 6: Information on application of proposed amendments as a part of disclosure initiative on
the selected company.......................................................................................................................8
Part 6.i: Change in page length of annual report..........................................................................9
Part 6.ii: Change in total number of notes to accounts................................................................9
Part 6.iii: Presentation of notes to accounts to reflect the logical categories...............................9
Part 6.iv: Change in disclosure related to accounting policies..................................................10

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Part 6.V: Use of boxes to highlight the information such as accounting estimation and
judgments...................................................................................................................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................14