In 2013, the International Accounting Standards Board (IASB) received feedback that stakeholders had three main concerns about the information that is disclosed in financial statements (IFRS, 2019). These three concerns, which are referred to as the ‘disclosure problem’, were: 1. not enough relevant information; 2. too much irrelevant information; and 3. ineffective communication of the information provided (IFRS, 2019). As a result, the IASB established the Disclosure Initiative for the purpose of exploring how to make disclosures more effective in financial statements (IFRS, 2019). As part of the Disclosure Initiative, the IASB completed four projects for the purpose of making “targeted improvements to IFRS Standards and guidance” in order to provide “tools to help preparers and other stakeholders improve communication in financial statements” (IFRS, 2019). These four projects were: 

1. Amendments to IAS 1 Presentation of Financial Statements; 

2. Amendments to IAS 7 Statement of Cash Flows; 

3. The publication of IFRS Practice Statement 2—Making Materiality Judgements; and 

4. The publication of amendments to IAS 1 and IAS 8 which refine the definition of material and clarify its application (IFRS, 2019). The main outcomes of the research project were: 1. Prioritisation of the IASB’s Targeted Standardslevel Review of Disclosures project; 2. Addition of a new project on accounting policy disclosures to the IASB’s agenda; and 3. Develop guidance and examples intended to help entities apply materiality judgements to accounting policy disclosure (IFRS, 2019). The Disclosure Initiative is part of the IASB’s 'Better Communication in Finanancial Reporting' project, details of which are provided in the following link to the IFRS webpage: https://www.ifrs.org/projects/better-communication.

REQUIRED - What concerns were expressed about the content and structure of the primary financial statements and how did the IASB respond to these concerns with reference to: a) the roles of primary financial statements and the notes; and b) the use of performance measures in financial statements. 6. Refer to both the 2014 and 2015 financial reports for any one of the following companies: a. Wesfarmers Ltd; b. QBE Insurance Group Ltd; c. Cochlear Ltd; or d. Brambles Ltd; and Answer the following questions: i. What was the page length of the financial report in both 2014 and 2015 and was it reduced in 2015 and by how much? ii. What was the total number of notes in the financial report in both 2014 and 2015 and were they reduced in 2015 and by how much? iii. Explain, using examples from both the 2014 and 2015 report, as to whether or not the notes to the financial statements were grouped into logical categories or sections in 2015 that aligned to the organisation’s business and strategy as opposed to 2014? iv. Compare and contrast the disclosure of accounting policies in the associated notes in both 2014 and 2014. Then, explain, using examples from both the 2014 and 2015 financial reports, as to whether the accounting policies in 2015 were disclosed with more simplified language. v. Were call out boxes utilised to highlight information on material estimates and judgements in 2015? Explain using examples from the 2015 financial report.

References Chartered Accountants Australia and New Zealand (CA) (2015) NOISE, NUMBERS AND CUTTHROUGH What is the future role of financial reporting? May 2015 IFRS Foundation (2017) Better Communication in Financial Reporting Making disclosures more meaningful. October 2017 IFRS Foundation (2018) Disclosure Initiative: Principles of Disclosure Better Communication in Financial Reporting projects. June 2018 IFRS Foundation (2019) Project Summary Disclosure Initiative—Principles of Disclosure March 2019 KPMG (2015) A new era in Corporate Reporting Review of recent corporate reporting and decluttering trends in the ASX 200.