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The FRC and the future of corporate reporting

07 November 2017

The FRC and the future of corporate reporting - Read more

The FRC is forecasting how technology can revolutionise corporate reports

The Financial Reporting Lab was set up in 2011 by the Financial Reporting Council (FRC), working with companies and investors to try new ways of reporting.

Back in May, the Lab issued the ‘Digital Future’ review, covering the use of technology in financial and corporate reporting. This followed the 2015 ‘Digital Present’ report, which considered how companies might better use technology to improve reporting online.

The project aims to identify what benefits the new mediums and technologies should offer, which technologies might be used, and how companies can make the most of digital tools. The Lab reviewed the three key stages to the reporting process: production, distribution and consumption.


This part involves collating, amalgamating, packaging and presentating information, and is of most interest to firms. It needs to be in line with current costs and provide the same or greater benefits, and must be compatible with current systems and support multiple reporting requirements, or capable of making them unnecessary by the multiple use or reuse of data.

It must also be easy to use, without the need for specialist technical skills or tools, and timely, in that the method should provide information as quickly or more quickly than the current system.


This stage handles dissemination to meet regulatory requirements (such as filing at Companies House and with the National Storage Mechanism) and communication with external stakeholders. It is of interest to both companies and users.

It needs to be free, with access to company information and peer, industry or national data sets in an easy-to-use format, and compliant, supporting the need to distribute and store regulated information.

Information should be released promptly, whether it is regular or otherwise, and accessible, allowing individual data points, disclosures and documents to be easily found at a company or industry level.


This focuses on the analysis and use of the information after it has been packaged and distributed, including where it is an individual piece of data, a disclosure or single document.

“Any new system must also be easy to navigate – it needs to make it easier for users to search for and find relevant pieces of information.”

It is important for users to understand the context of the information they are receiving, such as the type of report (annual, corporate responsibility); the period the report covers and its date of issue; the framework used; whether the data has been audited or assured; links to notes or other explanations; and how it ties in to other information about the company.


Information should be ready to upload – many users need to link the information into other reports or models and sometimes need the data to keep the link to its source. The system adopted should be widely-used and allow for all the required disclosures to be made.

Any new system must also be easy to navigate – it needs to make it easier for users to search for and find relevant pieces of information. Reports should not require specialist training or technical skills to access them, particularly when there will be many different stakeholders wishing to review the information.


Users need to be certain that information they are getting is secure and authentic. Reporting is meant to provide a permanent record of a company’s financial position at a certain point in time.

This is an opportunity to clarify the level of assurance and audit review of a particular piece of data; digital reporting should give users confidence in the authenticity of information provided by the company.


Any developments in digital reporting should improve the way that companies can engage with their audience. Firms often want to ‘tell their story’, while investors value standardised content, particularly when it is financial. Technology therefore needs to offer standardised content to allow comparisons, but also be flexible so firms can narrate.

Online reporting

Another useful document that has been produced by the Lab with the Corporate Reporting Users Forum is a one page tip sheet on making digital media and reporting work for investors.

The key points are:


Avoid excessive pictures in the annual report which make it look like a brochure, and double page spreads which do not work well online. If possible, the annual report should be available electronically on results day to boost transparency, although this could be a problem for many companies.


The ease of searching a document can be improved with bookmarks, hyperlinks and back buttons. Links to and from the notes at the back of the document to the primary financial statements can also be helpful. Companies should use contents pages and indexes in printed documents.


Investor content should be easy to find and access, and the contents of each section should be clear. Non-GAAP measures should be clearly shown as such and linked to reconciliations and explanations, while cross-referencing and signposting can prevent duplication.

“There is no need to wait for the next development before taking action”

Excel or iXBRL format downloads of all the tables in the annual report will assist analysts and others. This can also be provided for earnings releases and trading updates, using a consistent format to ease comparisons.

Audio and video

You should provide full transcripts (including Q&A) of any investor audio or videoconference calls, which makes it easier for investors to search. There is also the option of dividing longer videos into shorter sections with clear labels, allowing earier access.


Archived information should be easy to find and use. This should include not only annual reports but results announcements, transcripts and recordings of conference calls, presentations from roadshows, investor (capital markets) days and the annual general meeting, and any trading updates.

The information should be made available for as long as possible and not just for the minimum required period.


These should work well on desktops and mobile devices, with scrolling minimised. There should be pages with frequent investor questions and relevant news flow.

Investors also want to be able to access other information, such as notices of meetings, information on bond or debt issues, prospectuses, sustainability reports and so on. These should be well signposted from the main investor relations page.

Next steps

The above is all good practice and companies can start implementation now so everyone can benefit from the current technology. There is no need to wait for the next development before taking action.

The next stage of the project will seek to identify how new and existing technologies can meet the needs of companies and users. Technologies to be considered will include be virtual reality, augmented reality, blockchain, XBRL and other tagging techniques, video and other digital media.

Technology definitions

Virtual reality

Virtual reality is a technology that uses headsets, sometimes in combination with physical spaces or multi-projected environments, to generate realistic images, sounds and other sensations that simulate a user’s physical presence in an imaginary environment.

A person using virtual reality equipment is able to ‘look around’ the artificial world, and even move around in it and interact with virtual features or items. This could perhaps be used for virtual site visits to remote locations.

Augmented reality

Augmented reality is a live direct or indirect view of a physical, real-world environment whose elements are ‘augmented’ by computer-generated or extracted real-world sensory input such as sound, video, graphics or GPS data. It enhances a person’s current perception of reality, compared to virtual reality, which replaces the real world with a simulated one.

An example is overlaying supplemental information, such as scores, over a live video feed of a sporting event – or maybe showing voting over a live feed of the AGM in a company secretary context.


Blockchains are software for storing, managing and authenticating records across many machines, rather than relying on a central source. It serves as the public ledger for Bitcoin, among other things.

XBRL tagging

XBRL tagging is the process by which any financial data is labelled with the most appropriate element in an accounting taxonomy that best represents the data. There are also tags that facilitate identification or classification, such as enterprise, reporting period, reporting currency, and so on.

Video or other digital media

Digital media is any media encoded in machine-readable formats. Digital media can be created, viewed, distributed, modified and preserved on digital electronics devices.

Lorraine Young is a partner at Shakespeare Martineau

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