What are the digital reporting implications of updating the management commentary?
Many of our readers may be interested in an agenda paper presented at this month’s meeting of the IFRS Foundation’s IFRS Taxonomy Consultative Group (ITCG). In May, the International Accounting Standards Board (IASB) proposed a new comprehensive framework for preparing management commentaries, which accompany financial statements. The framework, currently out for consultation, is intended to reflect the changing reporting landscape, and better meet the broader information needs of today’s investors and creditors.
The ITCG agenda paper runs through the proposals, and discusses in detail their implications for digital reporting and the IFRS Taxonomy. On how the taxonomy should facilitate meaningful analysis by investors, it notes: “Narrative information is less structured and less comparable than numerical information. Consequently, investors might extract and analyse narrative information differently.”
On the tagging of disclosure objectives and examples of material information, it discusses the issue of level of detail, and the pros and cons of granularity. “We suggest creating hierarchical structure for text blocks to allow extraction of information at various levels of granularity,” it concludes, with elements corresponding to headline and specific objectives for each area of content. It also tackles the questions of whether and how to tag information relating to key matters and to deal with information relating to metrics.
Read more here.