ACCA SBR ^INT Syllabus E. Interpret Financial Statements For Different Stakeholders - Management Commentary - Notes ^{12 / 12}

Objective

To help management present a useful commentary to financial statements

(The Practice Statement is not an IFRS, so following it is not compulsory)

Scope

Management commentary..

"...provides users with historical explanations of the amounts presented in the financial statements.

...an entity's prospects and other information not presented in the financial statements.

..a basis for understanding management's objectives and its strategies"

Elements of the Commentary

• The nature of the business - including its external environment

• Management's objectives and strategies

• The entity's most significant resources, risks and relationships

• The results of operations and prospects

• The critical performance measures and indicators that management uses to evaluate the entity's performance against stated objectives