MD&A and IFRS
17 September 2009
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I am currently involved in the conversion from Canadian GAAP to IFRS. Are there any extra disclosures that need to be added to the MD&A to be IFRS compliant? Or are the increased disclosures in the notes to the financials sufficient?
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The Canadian regulators have not specifically proposed any additional MD&A disclosures as yet, but I think basic principles will compel some expansion compared to past practices. To take a very easy example, when management compensation information is disclosed in the notes, if there’s a material fluctuation from one period to the next it will be difficult not to address and explain that (if only at a high level) in the MD&A. Or for instance if the greater disclosure of provisions shows significant reconciling items or changes in assumptions from one period to the next, it will be difficult not to address that in the MD&A. So there is no black and white answer but the MD&A is basically meant to illuminate and explain what’s in the statements, and since IFRS generally generates more disclosures, I guess there will be more to explain. Of course, balancing this with good communication, accessibility etc. will be a challenge too…I have started to write about some aspects of this on our blog (wallaceifrsblog.ca)
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