| Description : |
The objective of this project is to develop a model for a narrative report, that would accompany but be presented outside of the financial statements, setting out management's explanation of the enterprise's financial condition, changes in financial condition, results of operations, and causes of changes in material line items. In this project, the Board will develop the principles and essential content elements necessary to make management commentary reporting useful to investors. The output of the project will be a non-mandatory, 'best practice' guidance document rather than an IFRS.
To summarise EFRAG's comments made in the draft comment letter:
· we support the IASB’s decision to develop high-level, principle-based, non-mandatory guidance on MC;
· we broadly support the detailed proposals, except that:
· we have some concerns about the desirable qualitative characteristics it is proposed that MC should have;
· we do not support the IASB’s decision to defer the development of placement principles until Phase E of the Conceptual Framework project. We think that some sort of placement principles are necessary to increase the effectiveness of financial reporting where MC is prepared.
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