In response to investor concerns, the IASB issued a revised practice statement on management commentary to remedy shortcomings found in current practice and to support greater global alignment in narrative reports accompanying financial statements.
A major overhaul of the practice statement aims to help companies “improve the quality and focus of information provided to investors”, a news release said. The revised statement also intends to serve as a global benchmark for regulators. The IASB also published an overview of the project’s objectives.
In the development stages, the IASB worked closely with the International Sustainability Standards Board (ISSB) to “help align the two boards’ respective requirements and to facilitate connected information” across a company’s financial reports, the release said.
“More specifically, the ISSB standards and the practice statement are both designed to … explain matters affecting a company’s prospects over the short, medium, and long term,” another release said. Applying the standards with the revised statement could help companies to incorporate sustainability-related financial disclosures within their management commentary.
The board’s updated practice statement and its basis-for-conclusions publication are available to view with an IFRS digital subscription, with the option of purchasing a PDF of the revised statement.
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