EFRAG publishes draft comment letter on IFRS Practice Statement Exposure Draft ED/2021/6 Management Commentary
29 July 2021
In May 2021, the IASB published Exposure Draft on Management Commentary which represents a major overhaul of IFRS Practice Statement 1: Management Commentary. The proposed framework sets out disclosure objectives for information about the company’s business model, strategy, resources and relationships, risks, external environment and financial performance and position.
EFRAG has now published its draft comment letter on the Exposure Draft. Overall, EFRAG has supported the proposed objective-based approach. However, EFRAG has suggested to address the subject of 'Governance' across the six proposed content elements, to give more emphasis to the discussion on 'Opportunities' and to consider an additional content element on 'Off-balance sheet commitments'. EFRAG has also suggested that the discussions on Intangibles and ESG matters could be expanded and given more emphasis in the main text and additional illustrative examples are suggested. EFRAG has also recommended that the IASB should consider the outcome of its ongoing consultation on the ED Disclosure Requirements in IFRS Standards—A Pilot Approach, to assess whether a similar two-tier objective-based approach could be applied to the revised Practice Statement.
The draft comment letter may be accessed here. Comments on the draft comment letter are requested by 15 November 2021.