IASB publishes IFRS Practice Statement on Management Commentary

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08 Dec 2010

The International Accounting Standards Board (IASB) has today published an International Financial Reporting Standard (IFRS) Practice Statement 'Management Commentary', a broad, non-binding framework for the presentation of narrative reporting to accompany financial statements prepared in accordance with IFRSs.

Management commentary is a narrative report, that accompanies but is presented outside of the financial statements, setting out management's explanation of the enterprise's financial condition, changes in financial condition, results of operations, and causes of changes in material line items. Many entities see management commentary as an important element of their communication with the capital markets, supplementing as well as complementing the financial statements.

The Practice Statement is not an IFRS. Consequently, entities applying IFRSs are not required to comply with the Practice Statement, unless specifically required by their jurisdiction. Furthermore, non-compliance with the Practice Statement will not prevent an entity's financial statements from complying with IFRSs, if they otherwise do so.

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An entity may apply the Practice Statement to management commentary presented prospectively from 8 December 2010.

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