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Management Commentary – International Accounting Standards Board

Date recorded:

At its meeting on May 20, 2020, the IASB discussed the disclosure objectives and supporting guidance to be included in the revised IFRS Practice Statement 1. The Board tentatively decided to specify in the disclosure objectives that management commentary should provide information and analysis to help investors and creditors understand:

(a) the risks that could disrupt the entity’s:

  1. business model;
  2. management’s strategy for sustaining and developing that model; or
  3. resources and relationships; and

(b) how the environment in which an entity operates affects its:

  1. business model;
  2. management’s strategy for sustaining and developing that model;
  3. resources and relationships; or
  4. risks.

The Board tentatively decided to specify in the disclosure objectives that the information and analysis included in management commentary should focus on (a) the key risks (i.e., risks that could disrupt the entity’s ability to create value and generate cash flows); and (b) the key factors and trends in the external environment (i.e., factors and trends that affect the entity’s ability to create value and generate cash flows).

The Board’s next discussions are expected to cover what information management commentary should provide on an entity’s performance, position and progress, aggregation of information in management commentary and the status of the Practice Statement.

Review the IASB Update and podcast on the Board's Web site.

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