Streamlining corporate reporting with FRC’s materiality mindset
The UK’s Financial Reporting Council (FRC) is spearheading a ‘materiality mindset,’ designed to push businesses towards a strategic approach to assessing materiality that can result in better reporting.
The FRC’s publication, ‘Materiality in practice: applying a materiality mindset,’ forms part of a new guidance series. It aims to assist companies in pinpointing material information for their stakeholders. The guidance includes practical recommendations to help companies recognise material issues, streamline reporting, and prioritise their messages.
The guidance recommends that companies focus on key issues, directing attention to priorities to ensure that reporting aligns with company goals. Understanding how investors use information to make decisions can also assist in making materiality assessments.
The FRC suggests a holistic approach. Rather than considering materiality in siloed quantitative, qualitative, and sustainability-related aspects, an interconnected view will better reflect how investors already understand information.
Finally, the FRC cautions that to embrace a materiality mindset, companies should continually review, assess, and refine their reporting processes, ensuring that the information presented is tailored to their stakeholders.
The FRC intends to expand its endeavours related to materiality, and it welcomes views and comments from all stakeholders in the field.
Dive into this topic on the FRC website.
