Review Highlights Need for Better Valuation Disclosure (Dec-2010)

(Media releases from the Securities Commission)
21 December 2010

Securities issuers need to include more information on how their financial assets and liabilities have been valued, says Securities Commission Chairman Jane Diplock.

Ms Diplock was commenting on findings from the latest review in the Commission's ongoing financial reporting surveillance programme, which aims to improve the credibility of financial reports and which looked closely at disclosure about valuations.

Recent amendments to reporting standards require disclosure about re-valued financial assets and liabilities. Issuers must include a breakdown showing the extent to which valuations are linked to market prices and the underlying assumptions for valuations which are not directly based on market prices.

The review also found that issuers need to ensure alternative performance measures, where disclosed, are better explained.

"Any disclosure of alternative performance measures needs to be properly communicated and not detract from statutory financial information," Ms Diplock said.

The Cycle 14 report, which will be published in the New Year, looked at 25 issuers' financial statements with balance dates between 31 March and 31 July 2010. The Commission is writing to 17 issuers on 32 matters.

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Contact: Rebecca Barclay 04 471 7666 or Roger Marwick 04 471 7659