IFRS Practice Statement Management Commentary

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Offline hassan

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IFRS Practice Statement Management Commentary
« on: April 28, 2018, 07:43:24 PM »
The objective of this Practice Statement is to assist management in presenting useful management commentary that relates to financial statements that have been prepared in accordance with International Financial Reporting Standards (IFRSs).

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.

The Practice Statement should be applied by entities that present management commentary that relates to financial statements prepared in accordance with IFRSs. It applies only to management commentary and not other information presented in financial statements or broader financial reports.

Management commentary is defined as:

"A narrative report that relates to financial statements that have been prepared in accordance with IFRSs. Management commentary provides users with historical explanations of the amounts presented in the financial statements, specifically the entity's financial position, financial performance and cash flows. It also provides commentary on an entity's prospects and other information not presented in the financial statements. Management commentary also serves as a basis for understanding management's objectives and its strategies for achieving those objectives."
Management commentary should provide users of financial statements (existing and potential investors, lenders and other creditors) with integrated information providing a context for the related financial statements, including the entity's resources and the claims against the entity and its resources, and the transactions and other events that change them.

Management commentary should be consistent with the following principles:

Provide management's view of the entity's performance, position and progress (including forward looking information) Supplement and complement information presented in the financial statements (and possess the qualitative characteristics described in the Conceptual Framework for Financial Reporting)
Management commentary should be clear and straightforward and be presented with a focus on the most important information in a manner intended to address the principles described in the Practice Statement, specifically:

being consistent with its related financial statements avoiding duplicating disclosures made in the notes to the financial statements where practicable avoiding generic and immaterial disclosures.
Md. Arif Hassan
Assistant Professor
Department of Business Administration
Faculty of Business and Economics
Daffodil International University