Narrative Reporting in Company Annual Accounts

11 Pages Posted: 20 Nov 2007

See all articles by Tim Ambler

Tim Ambler

London Business School

Andy Neely

University of Cambridge; London Business School

Date Written: November 16, 2007

Abstract

Companies are being pressed to be more transparent in their annual reporting and, at the same time, interest is moving from the formal accounts to the narrative sections, partly in response to the increasing importance of the intangible assets not on the balance sheet. The paper sets out the changes in UK requirements, summarised in a Framework provided by the Worshipful Company of Marketors, and company practice. The two weakest areas in relation to the Accounting Standards Board Reporting Standard are the provision of forward looking information and non-financial KPIs, especially those to do with customers, competitors and brands. The paper suggests that brand equity, the intangible marketing asset, is the present reservoir of future cash flow. Accordingly, provision of professional measures of brand equity should go some way towards solving both weaknesses at the same time.

Keywords: Narrative reports, Company annual reports, KPIs, compliance

JEL Classification: K22,L21

Suggested Citation

Ambler, Tim and Neely, Andy D., Narrative Reporting in Company Annual Accounts (November 16, 2007). Available at SSRN: https://ssrn.com/abstract=1030724 or http://dx.doi.org/10.2139/ssrn.1030724

Tim Ambler (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
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Andy D. Neely

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

HOME PAGE: http://www.ifm.eng.cam.ac.uk/people/adn1000/

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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