IFRS Practice Statement on Management Commentary – A Framework for Presentation

As dropped into my email INBOX on December 8, 2010, the IASB announced the publication of 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.

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.

What is Management Commentary ?

Management commentary is a narrative report that provides a context within which to interpret the financial position, financial performance and cash flows of an entity. It also provides management with an opportunity to explain its objectives and its strategies for achieving those objectives. Users routinely use the type of information provided in management commentary to help them evaluate an entity’s prospects and its general risks, as well as the success of management’s strategies for achieving its stated objectives. For many entities, management commentary is already an important element of their communication with the capital markets, supplementing as well as complementing the financial statements.

Management commentary is within the scope of the Conceptual Framework for Financial Reporting, therefore it should be read in the context of the Conceptual Framework.

When management commentary relates to financial statements, an entity should either make the financial statements available with the commentary or identify in the commentary the financial statements to which it relates.

Management should identify clearly what it is presenting as management commentary and distinguish it from other information.

When management commentary is presented, management should explain the extent to which the Practice Statement has been followed. An assertion that management commentary complies with the Practice Statement can be made only if it complies with the Statements in its entirety.

Management should determine the information to include in management commentary considering the needs of the primary users of financial reports. Those users are existing and potential investors, lenders and other creditors.

An entity may apply this Practice Statement to Management Commentary presented prospectively from 8 December 2010.

For the complete exposition, please download the softcopy : IFRS Practice Statement - Management Commentary

Starting 1 July 2010, IASC Foundation will be known as IFRS Foundation

On 1 July 2010 the IASC Foundation will formally change its name to the IFRS Foundation. The change represents the next step in a process to simplify the names in use across the organisation announced following the conclusion of the Constitutional Review in 2010. The International Financial Reporting Interpretations Committee (IFRIC) and the Standards Advisory Council (SAC) have already been renamed as the IFRS Interpretations Committee and the IFRS Advisory Council, respectively.

The name of the International Accounting Standards Board (IASB) will remain unchanged.

Beyond the change in name, there are no other changes affecting the legal status of the Foundation, its structure or its operating terms and conditions.

Source : www.iasb.org

Announcing a new IFRS Publication – 2010 IFRS Consolidated without early application

On Friday 22 January 2010 the IASC Foundation will launch a new publication, 'IFRS, Consolidated without early application'.

This new publication is different from our annual IFRS Bound Volume because it will consolidate only those IFRSs with an effective date no later than 1 January 2010.

The annual IFRS Bound Volume will follow the practice of previous years by consolidating all IFRSs issued at 1 January 2010, including those with an effective date later than 1 January 2010, and it will exclude IFRSs that are being superseded, even though they may still be applicable.

To distinguish the new publication from the annual Bound Volume, the cover will be blue, as shown below.

The annual Bound Volume will be published in two parts this year. Its cover will remain red (as in 2009) and our Education book, 'A Guide through IFRS' will remain green (as in 2009). Here at the IASC Foundation we are referring to our publications by colour - to the new publication as the 'Blue Book' and to the Bound Volume as the 'Red Book'. Please feel free to refer to the publications by the colour of their cover when corresponding with us.

The contents and timing of the annual Bound Volume (Red Book) will follow past practice

To give an example, in November 2009 the IASB issued IFRS 9 Financial Instruments with an effective date of 1 January 2013. This new IFRS, together with its copious amendments to other IFRSs, will be consolidated in the 2010 Bound Volume (the Red Book), because it was issued before 1 January 2010. It will not be included in the new Blue Book, because its effective date means that it is not required for annual reporting periods beginning on 1 January 2010.

The new Blue Book has been created as a direct response to comments from practitioners currently reporting under IFRSs. Those seeking a single volume obtaining all the requirements for the current year will value the Blue Book.

The annual IFRS Bound Volume (the Red Book) will, as in previous years, be available towards the end of the first quarter, but this year it will, for convenience, be presented in two parts.

The annual Bound Volume will continue to be the basis for IFRS Translation

Because the annual Red Book will contain the latest text of IFRSs issued by the IASB, it will continue to be the basis for IFRS translation. Translation for the purposes of IFRS adoption will necessarily require updated translations of the Red Book text. A need may also occur in some languages for translations of the Blue Book text, and we shall meet those needs as they arise.

Visit the shop to buy the Red Book in here, or the Blue Book in here, and the Green Book in here