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This list of key terms is for educational purposes only. Management Commentary terms are defined in Appendix A of the revised Practice Statement.

Create value

Create or preserve value for the entity and hence for its investors and creditors.

An entity’s activities create value if they enhance or preserve the present value of the entity’s future cash flows. 

General purpose financial reports

Reports that provide financial information about a reporting entity that is useful to primary users in making decisions relating to providing resources to the entity. Those decisions involve decisions about:

  1. buying, selling or holding equity and debt instruments;
  2. providing or settling loans and other forms of credit; or
  3. exercising rights to vote on, or otherwise influence, the entity’s management’s actions that affect the use of the entity’s economic resources.

General purpose financial reports include—but are not restricted to—an entity’s management commentary, general purpose financial statements and sustainability-related financial disclosures.

General purpose financial statements (financial statements)

A particular form of general purpose financial reports that provide information about the entity’s assets, liabilities, equity, income and expenses.

Key matters

Matters that are fundamental to an entity’s ability to create value and generate cash flows, including in the long term.

Management commentary

A particular form of general purpose financial reports that provide information that:

  1. enhances users’ understanding of the entity’s financial performance and financial position reported in its financial statements; and
  2. provides management’s insight into factors, including sustainability-related factors, that could affect the entity’s ability to create value and generate cash flows across all time horizons, including in the long term.

Material information

In the context of management commentary, information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial reports make on the basis of those reports, which include the management commentary and the related financial statements and which provide financial information about a specific reporting entity.

Metric

A measure used to monitor a quantitative or qualitative aspect of an entity’s financial or non-financial performance or position.

Primary users of general purpose financial reports (users)

Existing and potential investors, lenders and other creditors.

Sustainability-related financial disclosures

A particular form of general purpose financial reports that provide information about the reporting entity’s sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term, including information about the entity’s governance, strategy and risk management in relation to those risks and opportunities, and related metrics and targets.