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IFRS Practice Statement 1: Management Commentary

Practice Statement 2024 Issued
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Issued in December 2010, the Practice Statement Management Commentary provides a broad, non-binding framework for the presentation of management commentary that relates to financial statements that have been prepared in accordance with IFRS Standards.

Management commentary should provide users of financial statements with integrated information providing a context for the related financial statements, including the entity's resources and the claims against the entity and its resources, and the transactions and other events that change them. It also provides management with an opportunity to explain its objectives and its strategies for achieving those objectives.

The Practice Statement makes clear that management commentary should be consistent with the following principles:

  • Provide management's view of the entity's performance, position and progress (including forward looking information)
  • Supplement and complement information presented in the financial statements (and possess the qualitative characteristics described in the Conceptual Framework for Financial Reporting).

Although the particular focus of management commentary will depend on the facts and circumstances of an individual entity, the Practice Statement outlines the main elements of the information that should always be included in a management commentary.

The Practice Statement has not been updated or amended since its publication in December 2010. In line with a recommendation by the IFRS Foundation Trustees in their latest review of structure and effectiveness (2015-16), the staff have been monitoring developments in wider corporate reporting and the implications for the Board. At its November 2017 meeting, the Board decide to take on a project to revise and update the Practice Statement.

Standard history

IFRS Practice Statement 1 Management Commentary was issued in December 2010 for application from 8 December 2010. The text of the Basis for Conclusions is contained in Part C of this edition. 

Other Standards have made minor consequential amendments to IFRS Practice Statement 1 Management Commentary, including Amendments to References to the Conceptual Framework in IFRS Standards (issued March 2018).