Point 23, Point 24

Μanagement commentary should include explanations of the performance and progress of the entity during the period and its position at the end of that period. Those explanations provide users of the financial reports with insight into the main trends and factors affecting the business.

Point 28

In providing those explanations, management should describe the relationship between the entity’s results, management’s objectives and management’s strategies for achieving those objectives.

Point 25 to Point 27

In addition, management should provide discussion and analysis of significant changes in financial position, liquidity and performance compared with those of the previous period or periods, as this can help users to understand the extent to which past performance may be indicative of future performance.


Point 30a

Management should provide an analysis of the prospects of the entity, which may include targets for financial and non-financial measures.

Point 29

This information can help users of the financial reports to understand how management intends to implement its strategies for the entity over the long term.

Point 30b

When targets are quantified, management should explain the risks and assumptions necessary for users to assess the likelihood of achieving those targets.

Category 5: performance measures and indicators

Point 31, Point 32

Performance measures are quantified measurements that reflect the critical success factors of an entity. Indicators can be narrative evidence describing how the business is managed or quantified measures that provide indirect evidence of performance. Management should disclose performance measures and indicators (both financial and non-financial) that are used by management to assess progress against its stated objectives.

Point 33a

Management should explain why the results from performance measures have changed over the period or how the indicators have changed. This disclosure can help users of the financial reports assess the extent to which goals and objectives are being achieved.

Point 34

The performance measures and indicators that are most important to understanding an entity are those that management uses to manage that entity. The performance measures and indicators will usually reflect the industry in which the entity operates.

Point 37

Comparability is enhanced if the performance measures and indicators are accepted and used widely, either within an industry or more generally. Management should explain why the performance measures and indicators used are relevant.

Point 36

Consistent reporting of performance measures and indicators increases the comparability of management commentary over time. However, management should consider whether the performance measures and indicators used in the previous period continue to be relevant.

Point 33b

As strategies and objectives change, management might decide that the performance measures and indicators presented in the previous period’s management commentary are no longer relevant. When management changes the performance measures and indicators used, the changes should be identified and explained.

Point 35

If information from the financial statements has been adjusted for inclusion in management commentary, that fact should be disclosed. If financial performance measures that are not required or defined by IFRSs are included within management commentary, those measures should be defined and explained, including an explanation of the relevance of the measure to users. When financial performance measures are derived or drawn from the financial statements, those measures should be reconciled to measures presented in the financial statements that have been prepared in accordance with IFRSs.