Global standards body to revamp format of financial statements

A global accounting standards body aims to revamp how companies present financial information to give investors a clearer picture of performance.

The International Accounting Standards Board (IASB) wants to make company reports more uniform globally and increase discipline in how accountants present their findings.

The idea will be a central theme of a five-year plan presented by IASB on Wednesday, as a period of intense rulemaking draws to a close for the more than 100 countries that apply its standards.

IASB Chairman Hans Hoogervorst said he wants to define the format of a company's income statement, and some of the line items and subtotals in the statement.

"None of these are defined by us and this is why we have a lot of alternative performance measures as well," Hoogervorst told Reuters. "We will go in the direction of requiring more formatting, not just comparability of the bottom line, but above the bottom line as well.

"There has been for years a huge demand from investors to do this."

Better formatting of financial statements would also aid electronic reporting and machine reading of financial statements.

Included will be a clearer definition of "irregular" items in a financial statement.

"We are going to look at ways to make it possible to present a more persistent income stream with more discipline around it. If you want to say something is irregular, then there must indeed be evidence that it is irregular," Hoogervorst said.

The IASB also aims to finish work next year on a new accounting rule for insurers, and complete a revision of its "conceptual framework" or basic principles that underpin its standards.

(Reporting by Huw Jones; Editing by Susan Fenton)