AASB Exposure Draft ED 311 Management Commentary

Thursday, June 17, 2021

ED 311 proposes a comprehensive framework that entities could apply when preparing management commentary that complements their financial statements. The proposals represent a major overhaul of IFRS Practice Statement 1 Management Commentary.

The proposed framework builds on innovations in narrative reporting to enable entities to bring together in one place the information investors (and other users) need to assess an entity’s long-term prospects. The framework sets out disclosure objectives for information about the entity’s business model, strategy, resources and relationships, risks, external environment and financial performance and position. 

ASIC’s Regulatory Guide RG 247 Effective disclosure in an operating and financial review provides guidance to directors of listed entities on providing useful and meaningful information to shareholders or unitholders when preparing an operating and financial review (OFR) in a directors’ report. RG 247 also makes reference to the G100 Guide and existing Practice Statement for consideration to assist in fulfilling the OFR requirements.

The AASB Staff Paper Comparison of Narrative Reporting Requirements Applicable to For-Profit Entities noted that a number of similarities exist between this Exposure Draft and RG 247. The proposals provide an opportunity to consult on whether the Exposure Draft could provide further guidance compared to RG 247.

Please submit your comments to the AASB by 1 October 2021, via the AASB website, LinkedIn or email.

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