Reporting models on the catwalk.

(From Financial Director)

Byline: Peter Williams, a chartered accountant and freelance journalist.

It's a delicious irony that dissatisfaction with financial reporting has grown in proportion to its increasing complexity and volume. FDs and their staff struggling to cope with the changeover to international accounting standards will appreciate the news that there is a growing tide of opinion which believes the business reporting models need drastic overhauling.

Perhaps it is understandable that such opinion should be voiced when we are so close to achieving a level playing field in global reporting. Just because we all produce comparable accounting information does not make it any more useful.

This frustration with the current report model has been highlighted by the Institute of Chartered Accountants in England & Wales. This autumn, it is planning to publish a report summarising the major bodies of work in this field over the last 10 years. It promises to take account of the work of accountancy and other professional bodies, pressure groups and think-tanks.

The long-standing argument against the traditional financial reporting model is that the world it is trying to reflect has changed. The one area that has changed most significantly is the rise of the intangible. Physical assets have declined in importance as intangibles - human capital, brands, goodwill, and knowledge and intellectual know-how - have become the drivers that create business wealth. The history of financial reporting of the last 15 years is a tale of half-hearted, unsatisfactory attempts to deal with that inescapable fact.

But if the current isn't working, is there any chance of introducing a new model? One of the main objections to reforming the business model has always been the sheer difficulty of doing so - trying to co-ordinate regulatory and legal changes across so many governments and agencies.