The guidelines, backed by leading finance directors and the Stock Exchange, want company annual reports to carry a statement known as an 'Operating and Financial Review'. The statement would include a discussion of the factors that influenced the previous year's results as well as commenting on anything likely to have an impact on the future of the business.
David Tweedie, chairman of the Accounting Standards Board, which issued the proposals, said the statement would 'give the accounts back to the finance director'.
The standards issued by his board so far - covering cash flow and the format of the profit-and-loss account - had reduced their ability to choose how to present the figures. 'This will give them a chance to discuss the accounts, to say what the sustainable earnings are,' he added.
An operating statement was recommended by the Cadbury report on corporate governance, but companies will not be forced to include it in their accounts. Mr Tweedie hopes it will be adopted by most listed companies and all large ones.
It is backed by the 100 Group of finance directors, which worked with the ASB in producing the guidelines.
'We support strongly the operating and financial review statement, which we hope will be widely adopted,' said Michael Lawrence, its chairman.
Among the items that should be included are an explanation of abnormally low or high tax charges, information about treasury policies - whether hedging is used, for example - and details of restrictions on bringing funds held overseas back to Britain. It should also discuss trends or events in the company's markets - such as activity by competitors - that could affect performance.Reuse content