Dans cette dernière publication de Grant Thornton International, « Telling your Covid-19 story », un focus est réalisé sur la pertinence des informations à produire dans le cadre de la situation de crise que nous vivons actuellement.
En effet, les états financiers annuels constituent un vecteur de communication essentiel pour les investisseurs et les autres parties prenantes. Leur élaboration exige par conséquent qu’ils prennent correctement la mesure de la situation de pandémie mondiale liée à la Covid-19 et qu’ils s’inscrivent dans une démarche privilégiant la transparence pour décrire les incidences sur les comptes. La qualité des informations produites va être clé pour permettre aux utilisateurs des états financiers de comprendre la façon dont la crise est venue impacter les organisations et leur situation patrimoniale.
Alors qu’au cours des trois dernières années, l'accent avait été mis sur l’information et les impacts liés à l'introduction des nouvelles normes IFRS sur la comptabilisation des revenus, des instruments financiers et des contrats de locations, la pandémie mondiale a créé chez les lecteurs des états financiers une nouvelle attente forte sur la façon dont les groupes vont communiquer sur ces nouveaux événements.
Dans ce contexte, expliquer en quoi la situation liée à la Covid-19 affecte éventuellement les comptes, ne doit pas se réduire à un simple exercice de conformité avec les textes. Cela implique de concevoir une information intégrant le principe de matérialité tout en restant compatible avec les exigences réglementaires et des parties prenantes.
Les organes chargés de la gouvernance des entités, en particulier celles qui sont cotées, ont à cette occasion, l’opportunité de construire une communication qui permette de décrire la façon dont l’activité de leur groupe a évolué sur la période qui vient de s’écouler et la manière dont ils ont fait face à la pandémie.
Cette publication vous accompagnera dans la construction de l’information qui devra être produite pour expliquer comment la pandémie a affecté votre organisation et ce via un modus operandi reposant sur 4 étapes clés :
Découvrez ci-dessous la présentation de ce document en anglais.
Telling the Covid-19 story is not only about reflecting what the financial reporting standards require disclosure on.
Four Key Tools To Explain The Last 12 Months
Annual financial statements will always be a critical communication to investors and other stakeholders. But how effective will they be in explaining to your stakeholders how the global Covid-19 pandemic has affected your organisation?
While the focus over the last three years has been on explaining the introduction of new International Financial Reporting Standards (IFRS) dealing with revenue, financial instruments and leasing, readers of the financial statements will want to know how the global pandemic changed the business.
No matter what situation exists, preparers of financial statements need to get the content right. When drafting the financial statements that will be issued, management should be mindful of what others have done – particularly businesses in the same industry sector – when they tell their own Covid-19 story and they should never lose sight of what makes their business unique. This will take time and effort because the recognition, measurement and disclosure requirements set out in IFRS issued by the International Accounting Standards Board (IASB) can be complex and demanding.
Unfortunately, many users complain that IFRS generates financial statements that are cluttered, and important information is often hard to find.
Telling the Covid-19 story is not only about reflecting what the financial reporting standards require disclosure on. It is also about correctly applying the materiality concept to disclosure and not being fearful of regulatory and stakeholder challenge. A reluctance to deviate from well-established practices by adopting a ‘safety first’ mindset often results in duplication, irrelevance and many ‘boilerplate’ disclosures which is not what users, including many securities and audit regulators, want to see.
In light of Covid-19, those charged with the governance of reporting entities, particularly those that are listed, have another opportunity to reflect on how they want to tell their story of their business activities throughout 2020 and how they are responding to the pandemic. The art, rather than the science, of issuing high-quality financial statements in 2021 is to prepare those that will not only comply with all the technical requirements set out in IFRS, but also effectively communicate how the entity has adapted and reacted to the environment it has been operating in.
1. Comply but communicate
Telling the Covid-19 story effectively not only requires entities to comply with applicable accounting standards and regulations, their financial statements should also become an effective part of the wider communication to their stakeholders.
Be mindful that the financial statements are just one ‘piece of the puzzle’ when communicating with stakeholders. Make them more effective by considering the following:
2. Omit the immaterial
Make effective use of materiality to enhance the clarity and conciseness of the financial statements.
Incorrectly applying the concept of materiality is perceived to be one of the main drivers for overloaded financial statements. Information should only be disclosed if it is material. It is material if it could influence users’ decisions which are based on the financial statements.
The materiality assessment is the ‘filter’ in deciding what information to disclose and what to omit. Once it has been determined which specific line items require disclosure, entities should assess what to disclose about these items, including how much detail to provide and how best to organise the information in the financial statements. This can be done using a two-stage filtering process as follows:
3. Re-think the notes
Re-evaluate how the notes to the financial statements are organised to improve their effectiveness as a communication tool.
Being the largest section of the financial statements, the notes can have the greatest impact on the effectiveness of the financial statements as a communication tool. Improve the effectiveness of the notes by:
4. Prioritise the policies
The financial statements need only disclose the most significant accounting policies. The disclosures made should be relevant, specific to the reporting entity and in light of Covid-19 explain how the accounting policies have been applied throughout the reporting period.
The aim of accounting policy disclosures is to help users properly understand how the amounts included the financial statements were determined. To make accounting policy disclosures effective preparers should:
Articulate key estimates and judgements – effective disclosures about the most important estimates and judgements provide investors with a useful understanding of the amount included in the financial statements. So:
We can help you get up to date with current trends in financial reporting by providing:
Whatever stage you are at in making improvements to the content and presentation of your annual reports, our specialists offer pragmatic solutions, whilst still complying with IFRS.
The requirements set out in IFRS are often very detailed and technical. To the untrained eye, they can appear hard to navigate. But at Grant Thornton, we have people who are well versed in their intricacies and can translate them into language that you can understand and apply to your financial statements.
We hope you found this publication useful when thinking about how to tell your Covid-19 story. If you would like to discuss any of the points raised, talk to your Grant Thornton contact now.
