Our views on Management Commentary ED
02 Mar, 2010
Deloitte Touche Tohmatsu has submitted to the IASB our Letter of Comment on Exposure Draft 2009/6: Management Commentary.
We believe that management commentary is an important element of financial reporting and provides decision-useful information to the users. The recent financial crisis has highlighted that users benefit from explanatory information in addition to the financial statements which helps evaluate an entity's financial position, financial performance and cash flows. We are supportive of the Board establishing high-level principles to facilitate comparability amongst entities reporting under IFRSs and to enhance the usefulness of their financial reporting. We agree with the IASB that the status of any final document should be that of non-mandatory guidance. However, for the avoidance of any doubt, we suggest that the IASB should clarify that an entity's ability to claim compliance with IFRS in its financial statements does not depend on following this non-mandatory guidance on management commentary (BC 46 of the ED could imply otherwise). Accordingly, we support issuance of the ED as a final guidance document, with some clarifications noted below. Given the very high-level nature of the guidance, there may be requests for providing further guidance with respect to management commentary. In view of the Board's current agenda, we believe the Board should resist such requests in the near term and only consider such requests in the future in coordination with regulators around the world tasked with oversight over financial reports provided to investors. |