4 March 2010
Office of the Chief Executive
Alex Malley, FCPA
CPA Australia Ltd
ABN 64 008 392 452
Sir David Tweedie
Chairman
International Accounting Standards Board
30 Cannon Street
LONDON EC4M 6XH
United Kingdom
Level 20, 28 Freshwater Place
Southbank VIC 3006 Australia
GPO Box 2820
Melbourne VIC 3001 Australia
T +61 3 9606 9689
W www.cpaaustralia.com.au
E alex.malley@
cpaaustralia.com.au
Email: CommentLetters@iasb.org
Dear Sir David
Comments on ED 2009/6 Management Commentary
Thank you for the opportunity to comment on the International Accounting Standards Board (IASB) Exposure
Draft ED 2009/6 Management Commentary.
CPA Australia represents the diverse interests of more than 129,000 members in finance, accounting and
business in 110 countries throughout the world. Our mission is to make CPA Australia the global professional
accountancy designation for strategic business leaders. We make this submission on behalf of our members
and in the broader public interest.
CPA Australia broadly supports the provision of Management Commentary Guidance as proposed in the
Exposure Draft. The Appendix to this letter contains our response to the specific questions asked.
CPA Australia considers that a management commentary that is both forward looking and at the same time
focused on communicating how management manages the entity, will provide information that is useful to
existing and potential equity investors, lenders and other creditors. We also suggest that information
communicated by way of management commentary may be of interest to an entity’s wider stakeholder
constituency. CPA Australia notes the IASB’s observation that management commentary supplements and
complements the financial statements. We agree. Further, CPA Australia agrees with the IASB that the
[proposed] Guidance may help users to understand how resources that are not presented in the financial
statements could affect the entity’s operations and how non-financial factors have influenced the information
presented in the financial statements. We do not see the [proposed] Guidance as a replacement for other
types of reporting such as sustainability reporting, environmental reporting and carbon reporting.
Nevertheless, CPA Australia considers that the [proposed] Guidance can be an important bridge between
financial reporting and other forms of reporting (and supplements and complements other forms of reporting).
If you require further information on any of our views, please Dr Mark Shying, Senior Policy Adviser at
CPA Australia via email at mark.shying@cpaaustralia.com.au.
Yours sincerely
Alex Malley FCPA
Chief Executive Officer
cc: M. Shying
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Appendix
Specific Questions
1. Do you agree with the Board’s decision to develop a guidance document for the
preparation and presentation of management commentary instead of an IFRS? If not,
why?
Yes, CPA Australia supports the decision to provide guidance rather than an IFRS. We note
that the guidance in part is already provided within the Australian reporting framework (for
example, the Directors’ Report in the Corporations Act, the ASX’s Listing Rule 4.10.7 and
Guidance Note 10 [which reproduces the Group of 100 publication Guide to the Review of
Operations and Financial Condition], the ASX Corporate Governance Council Corporate
Governance Principles and Recommendations, and the AICD’s Underlying Profits). CPA
Australia believes that in some parts of the reporting framework, the Australian guidance goes
further or provides clarification on some of the ideas articulated in the [proposed] Guidance.
However, in other jurisdictions the reporting framework does not include any such requirements
or requirements of a lower quality. Accordingly, we support the IASB’s publication of guidance
(and not a standard).
2. Do you agree that the content elements described in paragraphs 24-39 are necessary for
the preparation of a decision-useful management commentary? If not, how should those
content elements be changed to provide decision-useful information to users of financial
reports?
Yes, CPA Australia agrees.
3. Do you agree with the Board’s decision not to include detailed application guidance and
illustrative examples in the final management commentary guidance document? If not,
what specific guidance would you include and why?
Yes, CPA Australia agrees with the IASB’s decision not to include detailed application guidance
and illustrative examples in the final guidance as it is for the management of an entity to decide
how best to apply the framework for the preparation and presentation of management
commentary in the particular circumstances of its business.
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