Financial Statement Discussion and Analysis

IPSASB Acknowledgment Draft (ED) 47 March 2012 Comments due: July 31, 2012 Proposed All-embracing Accessible Area Accounting Accepted Banking Anniversary Altercation and Assay The All-embracing Accessible Area Accounting Standards Board (IPSASB) sets All-embracing Accessible Area Accounting Standards (IPSASs) for use by accessible area entities, including national, regional, and bounded governments, and accompanying accurate agencies. A key allotment of the IPSASB’s action is to assemble the IPSASs, to the admeasurement appropriate, with the IFRSs issued by the IASB. The cold of the IPSASB is to serve the accessible absorption by ambience high-quality accessible area accounting standards and by facilitating the acceptance and accomplishing of these, thereby acceptable the affection and bendability of convenance throughout the apple and deepening accurateness and accountability of accessible area finances. -------------------- The structures and processes that abutment the operations of the IPSASB are facilitated by the All-embracing Federation of Accountants (IFAC). The mission of the All-embracing Federation of Accountants (IFAC) is to serve the accessible absorption by: accidental to the development, acceptance and accomplishing of high-quality all-embracing standards and guidance; accidental to the development of able able accountancy organizations and accounting firms, and to high-quality practices by able accountants; announcement the amount of able accountants worldwide; speaking out on accessible absorption issues area the accountancy profession’s adeptness is best relevant. International Accessible Area Accounting Standards, Acknowledgment Drafts, Consultation Papers, and another IPSASB publications are appear by, and absorb of, IFAC. The IPSASB and IFAC do not acquire albatross for accident acquired to any actuality who acts or refrains from acting in assurance on the absolute in this publication, whether such accident is acquired by apathy or otherwise. The IPSASB logo, ‘International Accessible Area Accounting Standards Board’, ‘IPSASB’, ‘International Accessible Area Accounting Standards’ ‘IPSAS’, the IFAC logo, ‘International Federation of Accountants’, and ‘IFAC’ are trademarks and anniversary marks of IFAC. Copyright © March 2012 by the All-embracing Federation of Accountants (IFAC). All rights reserved. Permission is accepted to accomplish copies of this assignment to accomplish best acknowledgment and acknowledgment provided that anniversary archetype bears the afterward acclaim line: “Copyright © March 2012 by the All-embracing Federation of Accountants (IFAC). All rights reserved. Acclimated with permission of IFAC. Permission is accepted to accomplish copies of this assignment to accomplish best acknowledgment and feedback. ” Appear by: REQUEST FOR COMMENTS This Acknowledgment Draft 47, Banking Anniversary Altercation and Analysis, was developed and accustomed by the All-embracing Accessible Area Accounting Standards Board (IPSASB). The proposals in this Acknowledgment Draft may be adapted in ablaze of comments accustomed afore actuality issued in final form. Comments are requested by July 31, 2012. Respondents are asked to abide their comments electronically through the IPSASB website, appliance the “Submit a Comment” link. Amuse abide comments in both a PDF and Word file. Also, amuse agenda that first-time users allegation annals to use this feature. All comments will be advised a amount of accessible almanac and will ultimately be acquaint on the website. Although IPSASB prefers that comments are submitted via its website, comments can additionally be beatific to Stephenie Fox, IPSASB Abstruse Director at [email protected] org. This advertisement may be downloaded chargeless of allegation from the IPSASB website: www. ipsasb. org. The accustomed argument is appear in the English language. Objective of the Acknowledgment Draft The cold of this Acknowledgment Draft (ED) is to adduce an accurate Accepted for the alertness of banking anniversary altercation and assay by accessible area entities. Guide for Respondents The IPSASB would acceptable comments on all of the affairs discussed in this Acknowledgment Draft. Comments are best accessible if they announce the specific branch or accumulation of paragraphs to which they relate, accommodate a bright anniversary and, area applicable, accommodate a advancement for another wording. The Specific Amount for Comments requested for the Acknowledgment Draft are provided below. Specific Amount for Comment 1: Do you accede that the absolute presented in this Acknowledgment Draft should be developed as an IPSAS, with the aforementioned akin of ascendancy as the accretion based IPSASs, which applies to all entities that adapt banking statements in accordance with IPSASs? Specific Amount for Comment 2: Do you accede that IPSAS 1 should be adapted to acutely announce that banking anniversary altercation and assay is not a basic of the banking statements? Specific Amount for Comment 3: Is the ambit of banking anniversary altercation and assay acutely authentic so as to analyze it from another issues actuality addressed by the IPSASB (e. g. , banking statements, anniversary accomplishment reporting, advertisement on the abiding sustainability of accessible finances)? Specific Amount for Comment 4: Is the adapted agreeable for banking anniversary altercation and assay appropriate? 3 Specific Amount for Comment 5: Do you accede with the capricious provisions? Specific Amount for Comment 6: Is the Accomplishing Advice advantageous to compassionate the requirements of the proposed IPSAS? Specific Amount for Comment 7: Is the Illustrative Archetype a advantageous way of illustrating the requirements of the proposed IPSAS? 4 IPSAS XX (ED 47)—FINANCIAL STATEMENT DISCUSSION AND ANALYSIS CONTENTS Branch Cold .............................................................................................................................. Ambit .................................................................................................................................... Requirement for Banking Anniversary Altercation and Assay ........................................... Definition ............................................................................................................................... Qualitative Characteristics .................................................................................................... Anatomy and Agreeable of Banking Anniversary Altercation and Assay .............................. Identification and Albatross ..................................................................................... Compliance with this IPSAS ........................................................................................... Minimum Adapted Agreeable ............................................................................................ Overview of the entity............................................................................................... Advice about the entity’s objectives and strategies .......................................... Assay of the entity’s banking statements .......................................................... Risks and uncertainties ............................................................................................ Transition............................................................................................................................... Able Date ........................................................................................................................ Appendix A: Amendments to Another IPSASs Abject for Conclusions Another Appearance Accomplishing Advice Illustrative Archetype 1 2? 5 6–7 8 9 10? 32 11–12 13–14 15? 32 18 19–20 21–26 7–32 33–34 35–36 5 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS All-embracing Accessible Area Accounting Accepted XX (ED 47), Banking Anniversary Altercation and Assay is set out in paragraphs 1–36. All the paragraphs accept according authority. IPSAS XX (ED 47) should be apprehend in the ambience of its objective, the Abject for Conclusions, and the Preface to All-embracing Accessible Area Accounting Standards. IPSAS 3, Accounting Policies, Changes in Accounting Estimates and Errors provides a abject for selecting and applying accounting behavior in the absence of absolute guidance. FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Cold 1. The cold of this Accepted is to appoint the abode in which banking anniversary altercation and assay should be able and presented. To accomplish this objective, this Accepted sets out all-embracing considerations for the advice for its structure, minimum requirements for the agreeable and presentation to acquiesce entities to adapt banking anniversary altercation and assay for their specific affairs to abetment users to accept the banking statements. Ambit 2. An article that prepares and presents accepted purpose banking statements (“financial statements”) in accordance with IPSAS 1, Presentation of Banking Statements, shall adapt and present banking anniversary altercation and analysis. Banking anniversary altercation and assay shall be able for the aforementioned advertisement article that prepares and presents banking statements beneath the accretion abject of accounting. This Accepted applies abandoned to banking anniversary altercation and analysis. It does not administer to another advice included in accessible abstracts issued in affiliation with the banking statements. This Accepted applies to all accessible area entities another than Government Business Enterprises. The Preface to All-embracing Accessible Area Accounting Standards issued by the IPSASB explains that Government Business Enterprises (GBEs) administer IFRSs issued by the IASB. GBEs are authentic in IPSAS 1. 3. 4. 5. Claim for Banking Anniversary Altercation and Assay 6. 7. An article shall affair the banking anniversary altercation and assay back it issues banking statements. IPSAS 1 requires banking statements to be able at atomic annually. Some entities may adapt abridged acting banking information. This Accepted requires an article to affair banking altercation and assay in affiliation with the entity’s anniversary banking statements. Definition 8. The afterward appellation is acclimated in this Accepted with the acceptation specified: Banking anniversary altercation and assay is an anniversary of the cogent items, transactions, and contest presented in an entity’s banking statements and the trends and factors that afflicted them. Acceding authentic in another IPSASs are acclimated in this Accepted with the aforementioned acceptation as in those Standards, and are reproduced in the Glossary of Authentic Acceding appear separately. Qualitative Characteristics 9. Banking anniversary altercation and assay shall accommodate advice that possesses the qualitative characteristics of accepted purpose banking letters articular in Appendix A of IPSAS 1. 7 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Anatomy and Agreeable of Banking Anniversary Altercation and Assay 10. Banking anniversary altercation and assay shall be constant with the banking statements, and based on currently-known facts and acceptable assumptions. Identification of Banking Anniversary Altercation and Assay 11. 12. Banking anniversary altercation and assay shall be articular clearly, and acclaimed from the banking statements. Abstracted identification of banking anniversary altercation and assay enables users to distinguish: (a) (b) Banking statements able and presented beneath the accretion abject of accounting in accordance with IPSASs; and Another advice presented in an anniversary abode or another certificate that may be advantageous to users but is not the answerable of requirements in IPSASs. Compliance with this IPSAS 13. An article whose banking anniversary altercation and assay complies with this IPSAS shall accomplish an absolute and amoral anniversary of such compliance. Banking anniversary altercation and assay shall not be declared as acknowledging with this IPSAS unless it complies with all the requirements of this IPSAS. In some jurisdictions, alertness and presentation of banking anniversary altercation and assay is adapted by legislative, regulatory, or another externally-imposed regulations. Entities are encouraged to acknowledge advice about acquiescence with those requirements. 14. Minimum Adapted Agreeable 15. To the admeasurement it does not carbon advice in the banking statements, banking anniversary altercation and assay shall include, at a minimum: (a) (b) (c) (d) 16. An overview of the entity; Advice about the entity’s objectives and strategies; An assay of the entity’s banking statements, including variances and trends; and Advice about the entity’s risks and uncertainties, including its accident administration strategy. Financial anniversary altercation and assay provides advantageous advice to users for accountability and controlling purposes. However, some affairs may be adapted to be included in the banking statements by accordant IPSASs that may additionally be adapted to be included in banking anniversary altercation and assay in accordance with this Standard. In those cases, banking anniversary altercation and assay should not abandoned echo what is in the banking statements, but it should accompaniment and supplement the banking anniversary explanations by accouterment insights and perspectives thereon. Although the specific advice independent in an entity’s banking anniversary altercation and assay will alter depending on the facts and affairs specific to the entity, assertive basic elements are important to all banking anniversary altercation and analysis, as discussed below. 17. 8 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Overview of the Article 18. An overview of the article helps users to accept the article and how the ambiance in which it operates affect an entity’s banking statements. This advice is the starting point in acceptable users’ compassionate of an entity’s banking statements. Information provided about an entity’s operations in banking anniversary altercation and assay may accommodate accepted information, and changes from the above-mentioned year, about: (a) (b) (c) (d) The entity’s mission and vision; The entity’s babyminding (e. g. , aldermanic or accurate structure, administration structure); The entity’s relationships with another entities (e. g. , allotment arrangements); External trends, contest and developments in the legal, regulatory, social, political, and macro-economic ambiance specific to the entity, which accept or may accept a absolute appulse on the entity’s banking position and banking accomplishment (e. . , the appulse of a bounded or all-embracing banking crisis on employment, the tax base, or absorption ante in the jurisdiction); and The entity’s basic operations, including anniversary commitment methods (e. g. , outsourcing, anniversary acknowledgment arrangements) and cogent changes in them. (e) Advice about the Entity’s Objectives and Strategies 19. Banking anniversary altercation and assay should altercate the entity’s objectives and strategies in a way that enables users of the banking statements to accept the entity’s priorities and to analyze the assets that allegation be managed to accomplish its objectives. Financial anniversary altercation and assay should additionally explain how the accomplishment of the entity’s banking objectives (e. g. , debt abridgement strategy) will be measured. Banking anniversary altercation and assay should altercate cogent changes in an entity’s objectives and strategies from the antecedent aeon or periods. 20. Assay of the Entity’s Banking Statements 21. Banking anniversary altercation and assay should call the cogent contest and activities that accept afflicted the banking statements, afterwards artlessly bombastic the advice presented in those banking statements. A abrupt altercation of the purpose of, and advice provided by, anniversary basic of the banking statements set out in IPSAS1, and their interrelationships should additionally be provided. In addition, there should be a altercation of cogent commitments, contingencies, and contest occurring afterwards the advertisement date. If banking accomplishment measures that are not adapted or authentic by IPSASs are included aural banking anniversary altercation and analysis, those measures should be authentic and explained, including an anniversary of the appliance of the admeasurement to users. When banking accomplishment measures are acquired or fatigued from the banking statements, those measures should be accommodated to measures presented in the banking statements that accept been able in accordance with IPSASs. In addition, anecdotal explanations of such illustrations should be provided if all-important to accurately and absolutely present the information. Allusive advice should be included in banking anniversary altercation and assay back it is accordant to an compassionate of the accepted period’s banking statements. 9 22. 23. FINANCIAL STATEMENT DISCUSSION AND ANALYSIS 4. Banking statements can accept a predictive or -to-be role. This Accepted does not crave the article to acknowledge advanced information, such as forecasts or projections. However, banking anniversary altercation and assay should explain cogent changes and trends in an entity’s banking position and banking performance. An assay of trends includes those banking anniversary items that are important and cogent to accepting a bigger compassionate of an entity’s banking position and accomplishment and changes in banking position and accomplishment over a aeon of time. Identification of the basic events, trends, and factors influencing the accepted advertisement aeon may accommodate advice about the entity’s advised accomplishments in affiliation to such events, trends, and factors because the affair amenable for the alertness of the entity’s banking anniversary altercation and assay possesses abreast expectations apropos the entity’s approaching operations based on its abundant adeptness of the entity’s accepted operations. To the admeasurement such advice is not included in the banking statements, banking anniversary altercation and assay should accommodate advice about cogent absolute and abrogating variances between: (a) (b) Absolute after-effects and the budget; and The above-mentioned year and accepted year banking statements, by answer cogent changes and highlighting trends. 25. 26. Risks and Uncertainties 27. Advice about the entity’s risks and uncertainties helps users to appraise the appulse of risks in the accepted aeon (e. . , accidental liabilities appear in the banking statements) as able-bodied as accepted outcomes. Advice provided may accommodate its basic exposures to accident and changes in those risks, its opportunities, forth with its behavior and strategies for mitigating the risks and capitalizing on opportunities. It may additionally accommodate the entity’s appraisal of the capability of its accident administration strategies. It is noted, however, that these charge to be fact-based and booty into anniversary currently-known conditions. In addition, basal assumptions charge to be disclosed. Advice about the entity’s risks and uncertainties may accommodate a altercation of such affairs as a arbitrary of the entity’s advance action and another agency of managing its risks, allowance coverage, and another controls advised to aegis the entity’s assets. It may additionally accommodate the accordant legislation, adjustment or anatomy that sets the accident administration behavior for the article (e. g. , back risks are managed at a government-wide level). A altercation of how the entity’s manages its risks helps users access a complete account of the entity’s acknowledgment to risks that anon affect banking anniversary items and disclosures, which allows them to appraise the entity’s banking position and banking performance. Such acknowledgment may accommodate the entity’s accommodation to “self-insure”, or to abate accident by appointment or administration it, or through insurance. Added advice may be provided about uncertainties such as ecology issues, and cogent contest afterwards the advertisement date (see IPSAS 14, Contest Afterwards the Advertisement Date), which may affect the entity’s approaching operations (e. g. debt issuance, guarantees issued in affiliation to a banking crisis, or entering into a new anniversary acknowledgment arrangement). Advice may additionally be provided about the entity’s opportunities; about in advertisement such information, affliction allegation be taken to ensure it is fact-based, and neutral. This agency that the assumptions fabricated are based on altitude that abide at the advertisement date and contest that occurred in the accepted period. 10 28. 29. 30. FINANCIAL STATEMENT DISCUSSION AND ANALYSIS 31. A altercation of the risks the article faces additionally provides accordant advice to users about acknowledgment or vulnerability to concentrations of risks such as cogent loans to accurate regions or industries, or assurance on a accurate antecedent of revenue. Risks and uncertainties may accept a accepted aftereffect on the banking statements, appropriately advice pertaining to risks and uncertainties may be appear separately, or in accordant sections throughout the banking anniversary altercation and analysis. 2. Transition 33. 34. All accoutrement of this Accepted shall be activated from the date of aboriginal acceptance of this Standard. An article that has activated the capricious accouterment in IPSAS 1 to present abandoned accepted aeon advice in the banking statements to which accretion accounting is aboriginal adopted in accordance with IPSASs is acceptable to omit the allusive advice declared in branch 23 from its banking anniversary altercation and assay for that period. Effective Date 35. An article shall administer this Accepted to banking anniversary altercation and assay that relates to anniversary banking statements accoutrement periods alpha on or afterwards MM DD, YYYY. Earlier appliance is encouraged. If an article applies this Accepted for a aeon alpha afore MM DD, YYYY, it shall acknowledge that actuality and administer IPSAS 1 and IPSAS 24, Presentation of Account Advice in Banking Statements at the aforementioned time. Back an article dopts the accretion abject of accounting as authentic by IPSASs for banking advertisement purposes consecutive to this able date, this Accepted applies to the entity’s banking anniversary altercation and assay accoutrement periods alpha on or afterwards the date of adoption. 36. 11 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Appendix A Amendments to Another IPSASs IPSAS 1, Presentation of Banking Statements A new branch is amid afterwards branch 21 as follows: Apparatus of Banking Statements 21. A complete set of banking statements comprises: (a) (b) (c) (d) (e) A anniversary of banking position; A anniversary of banking performance; A anniversary of changes in net assets/equity; A banknote breeze statement; Back the article makes about accessible its accustomed budget, a allegory of account and absolute amounts either as a abstracted added banking anniversary or as a account cavalcade in the banking statements; and Notes, absolute a arbitrary of cogent accounting behavior and another allegorical notes. (f) 21A. Banking anniversary altercation and assay is not a basic of the banking statements. IPSAS XX (ED 47), Banking Anniversary Altercation and Assay requires banking anniversary altercation and assay to be presented in affiliation with its banking statements. A new branch is amid afterwards branch 24 as follows: 24. Accessible area entities are about answerable to bread-and-butter banned in the anatomy of appropriations or account authorizations (or equivalent), which may be accustomed aftereffect through acceding legislation. Accepted purpose banking advertisement by accessible area entities may accommodate advice on whether assets were acquired and acclimated in accordance with the accurately adopted budget. Entities that accomplish about accessible their accustomed budget(s) are adapted to accede with the requirements of IPSAS 24, Presentation of Account Advice in Banking Statements. For another entities, area the banking statements and the account are on the aforementioned abject of accounting, this Accepted encourages the admittance in the banking statements of a allegory with the approaching amounts for the advertisement period. Advertisement adjoin budget(s) for these entities may be presented in assorted altered ways, including: ? The use of a columnar architecture for the banking statements, with abstracted columns for approaching amounts and absolute amounts. A cavalcade assuming any variances from the account or allotment may additionally be presented for completeness; and Acknowledgment that the approaching amounts accept not been exceeded. If any approaching amounts or appropriations accept been exceeded, or costs incurred afterwards allotment or another anatomy of authority, again capacity may be appear by way of comment to the accordant account in the banking statements. ? 12 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS 4A. Back an article elects, beneath IPSAS 24, to explain, in banking anniversary altercation and assay rather than by way of agenda disclosure, absolute differences amid the approaching and absolute amounts articular in branch 24, it applies the advice in IPSAS XX (ED 47). Paragraphs 27 and 28 are adapted as follows: All-embracing Considerations Fair Presentation and Acquiescence with IPSASs 27. Banking statements shall present adequately the banking position, banking performance, and banknote flows of an entity. Fair presentation of the banking statements requires the aithful representation of the furnishings of transactions, another events, and altitude in accordance with the definitions and acceptance belief for assets, liabilities, revenue, and costs set out in IPSASs applicative to the banking statements. The appliance of these IPSASs, with added disclosures back necessary, is accepted to aftereffect in banking statements that accomplish a fair presentation. An article whose banking statements accede with IPSASs applicative to the banking statements shall accomplish an absolute and amoral anniversary of such acquiescence in the notes. Financial statements shall not be declared as acknowledging with IPSASs unless they accede with all the requirements of those IPSASs. 28. Branch 62 is adapted as follows: Identification of the Banking Statements … 62. IPSASs administer to banking statements and banking anniversary altercation and analysis, and not to another advice presented in an anniversary abode or another document. Therefore, it is important that users can analyze advice that is able appliance IPSASs from another advice that may be advantageous to users but is not the answerable of those requirements. A new branch is amid afterwards branch 153D as follows: Able Date 153E. Paragraphs 21A and 24A were amid and paragraphs 27, 28 and 62 were adapted by IPSAS XX (ED 47) issued in Month 201X. An article shall administer those amendments for anniversary banking statements accoutrement periods alpha on or afterwards Month DD, 201X. Earlier appliance is encouraged. If an article applies the amendments for a aeon alpha afore Month DD, 201X, it shall acknowledge that actuality and at the aforementioned time administer IPSAS XX (ED 47) and the amendments to paragraphs 14, 19 and 54A of IPSAS 24. 3 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS IPSAS 24 Presentation of Account Advice in Banking Statements Branch 14 is adapted as follows: Presentation of a Allegory of Account and Absolute Amounts 14. Answerable to the requirements of branch 21, an article shall present a allegory of the account amounts for which it is captivated about answerable and absolute amounts, either as a abstracted added banking anniversary or as added account columns in the banking statements currently presented in accordance with IPSASs. The allegory of account and absolute amounts shall present abandoned for anniversary akin of aldermanic oversight: (a) (b) (c) The aboriginal and final account amounts; The absolute amounts on a commensurable basis; and By way of agenda disclosure, an anniversary of absolute differences amid the account for which the article is captivated about answerable and absolute amounts, unless such anniversary is included in either the banking anniversary altercation and assay or another accessible abstracts issued in affiliation with the banking statements, and a cantankerous advertence to those abstracts is fabricated in the notes. Paragraph 19 is adapted as follows: 19. Administration IPSAS XX (ED 47), Banking Anniversary Altercation and Assay requires presentation of a banking anniversary altercation and analysis, operations review, or another accessible letters that provides annotation on the accomplishment and achievements of the article during the advertisement period,. It can accommodate including explanations of any absolute differences from account amounts,. Alternatively, this anniversary could be included in another accessible abstracts are about issued in affiliation with the banking statements. In accordance with branch 14(c) of this Standard, anniversary of absolute differences amid absolute and account amounts will be included in addendum to the banking statements, unless (a) included in the banking anniversary altercation and assay or another accessible letters or abstracts issued in affiliation with the banking statements, and (b) the addendum to the banking statements analyze the letters or abstracts in which the anniversary can be found. Back an article presents the actual-to-budget allegory in banking anniversary altercation and analysis, it applies the advice in IPSAS XX (ED 47). A new branch is amid afterwards branch 54 as follows: Able Date 54A. Paragraphs 14 and 19 were adapted by IPSAS XX (ED 47) issued in Month 201X. An article shall administer those amendments for anniversary banking statements accoutrement periods alpha on or afterwards Month DD, 201X. Earlier appliance is encouraged. If an article applies the amendments for a aeon alpha afore Month DD, 201X, it shall acknowledge that actuality and at the aforementioned time administer IPSAS XX (ED 47) and the amendments to paragraphs 21A, 24A, 27, 28, 62 and 153E of IPSAS 1. 14 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Abject for Conclusions This Abject for Conclusions accompanies, but is not allotment of, IPSAS XX (ED 47). Ambit and Ascendancy BC1. The IPSASB accustomed a activity in March 2008 to abode “narrative reporting”. In developing this Standard, the IPSASB antiseptic that the ambit of the activity is to abode abandoned those letters that accommodate altercation and assay accurately pertaining to an entity’s accepted purpose banking statements (“financial statements”) as set out in IPSAS 1, and not broader types of letters that may be advised accepted purpose banking letters as envisaged in the IPSASB’s Conceptual Framework. BC2. In adventure this project, the IPSASB considered, beneath its Belief for Modifying IASB Documents, whether to advance advice that was converged with Administration Commentary, an IFRS Convenance Statement. The IPSASB did not accede this access to be adapted because: (a) The users articular in the Convenance Anniversary are investors. IPSAS 1, Presentation of Banking Statements, identifies altered users, which after-effects in altered advice needs accompanying to the banking statements. Additionally, in the clandestine area there may be a able access from the antithesis exchanges and their regulators which advice ensure and reinforce the advice needs of the investors. In the accessible area there may not be a commensurable regulator, which participates in the action of standardizing banking anniversary altercation and assay for a jurisdiction, and appropriately assurance on the clandestine area advice may aftereffect in accident of accountability in the accessible sector. (b) BC3. Financial anniversary altercation and assay is advised to abode agnate affairs to letters that may be termed “management altercation and analysis” and “management commentary” in assorted jurisdictions. However, the IPSASB did not accede those acceding to accurately call the attributes of the abode in affiliation to the banking statements. The IPSASB absitively it was important to articulation banking anniversary altercation and assay to the banking statements because the banking anniversary altercation and assay is advised to explain the banking statements, and not to angle alone. The IPSASB considers the appellation “financial anniversary altercation and analysis” acutely defines the ambit of account of this Accepted and its abutting bond to the banking statements. BC4. The IPSASB advised whether accessible area entities that adapt and present banking statements in accordance with All-embracing Accessible Area Accounting Standards (IPSAS): (a) (b) Should be adapted to adapt banking anniversary altercation and analysis; and If so, whether banking anniversary altercation and assay should be included as an basic allotment of the accepted purpose banking statements. BC5. The IPSASB considers that banking anniversary altercation and assay provides added advice all-important to accommodated the objectives of banking statements. The IPSASB assured that all entities that adapt and present their banking statements in accordance with IPSASs should be adapted to adapt banking anniversary altercation and assay in accordance with this IPSAS, which has the aforementioned akin of ascendancy as accretion based IPSASs. 15 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS BC6. The IPSASB absitively it was important to advance a accepted that provided attempt for banking anniversary altercation and analysis, while acceptance advertisement on specific advice best accordant to an entity. Accordingly, this Accepted has been developed from a principlesbased angle that can be activated to all accessible area entities. In addition, entities are encouraged to adapt banking anniversary altercation and assay that meets their specific circumstances. The IPSASB advised whether a claim to affair banking anniversary altercation and assay back an article issues banking statements able in accordance with IPSASs would be an impediment to the acceptance of IPSASs. The IPSASB advised that the users of banking statements in such jurisdictions may alike accept a greater charge for the account of banking anniversary altercation and assay to advice explain the banking statements. The IPSASB considers that in all cases, the allowances of accouterment banking anniversary altercation and assay would outweigh the costs of advancing it, as the advice is acclimated in the alertness of the banking statements, and tailored to the specific affairs of the entity. The IPSASB appropriately assured that banking anniversary altercation and assay should be able by all entities that adapt their banking statements in accordance with IPSASs. IPSAS 1 defines the ambit of the banking statements. The IPSASB does not accede banking anniversary altercation and assay to be allotment of the banking statements able in accordance with IPSASs admitting its abutting articulation to the banking statements. The IPSASB did not, therefore, alter IPSAS 1 to accommodate banking anniversary altercation and assay as an basic allotment of the banking statements. Nevertheless, the IPSASB has antiseptic the abutting articulation amid the banking statements and banking anniversary altercation and analysis. BC7. BC8. BC9. BC10. The IPSASB acclaimed the affair that, if this Accepted were an IPSAS, it could still be advised allotment of the banking statements and there could be abashing as to whether it would be answerable to the aforementioned assay requirements as the banking statements. This could account difficulties in some jurisdictions if the admittance of banking anniversary altercation and assay resulted in a able assay abode on the banking statements. While the assay of banking anniversary altercation and assay is desirable, the IPSASB considers that arty an assay claim on such advice exceeds its mandate. However, it is acclaimed that an assay of banking statements would not automatically crave audited banking anniversary altercation and analysis. The appellation “financial statements” commonly refers to a complete set of banking statements as bent by the requirements of the applicative banking advertisement framework. The banking advertisement framework for accessible area entities is declared in IPSAS 1, and does not accommodate banking anniversary altercation and analysis. BC11. To date, IPSASs accept addressed abandoned affairs that affect to the agreeable of the banking statements themselves. The IPSASB advised whether it would be adapted to acquiesce for a new blazon of advertisement that had agnate accurate cachet to the IPSASs. The IPSASB is of the appearance that introducing a new blazon of advertisement would be ambagious to its constituents. Accordingly, the IPSASB has absitively that an All-embracing Accessible Area Accounting Accepted (IPSAS) is the adapted blazon of advertisement to administer to the banking anniversary altercation and analysis. 6 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Qualitative Characteristics BC12. The IPSASB additionally assured that the advice in banking anniversary altercation and assay should acquire the qualitative characteristics and constraints in IPSAS 1. Accordingly, IPSAS XX (ED 47) contains requirements that banking anniversary altercation and assay accommodate advice that is constant with those qualitative characteristics. Anatomy and Agreeable of Banking Anniversary Altercation and Assay BC13. Paragraph 21 of IPSAS 1 states that a complete set of banking statements comprises: (a) (b) (c) (d) (e) A anniversary of banking position; A anniversary of banking performance; A anniversary of changes in net assets/equity; A banknote breeze statement; Back the article makes about accessible its accustomed budget, a allegory of account and absolute amounts either as a abstracted added banking anniversary or as a account cavalcade in the banking statements; and Notes, absolute a arbitrary of cogent accounting behavior and another allegorical notes. The IPSASB acclaimed that in some of the minimum adapted agreeable in branch 15 of IPSAS XX (ED 47) may additionally be adapted beneath another IPSASs for banking statements. IPSAS XX (ED 47) appropriately requires banking anniversary altercation and assay accommodate cogent items, transactions, and contest that are presented in an entity’s banking statements to the admeasurement it does not carbon advice in the banking statements. BC14. The IPSASB acclaimed that the agreeable and architecture of presentation of banking anniversary altercation and assay should be bent by the entity, in a way that best reflects its circumstances, acquainted that the specific advice independent in an entity’s banking anniversary altercation and assay will alter depending on the facts and affairs specific to the entity. The IPSASB wishes to abstain a account access that may aftereffect in an article advertisement beneath accordant information. Accordingly, some adaptability is provided in the agreeable and format. However, the Accepted contains assertive basic adapted agreeable that is important to all banking anniversary altercation and analysis. BC15. In free the affairs that should be adapted in banking anniversary altercation and analysis, the IPSASB advised and compared absolute civic standards, guidance, and accurate requirements for banking anniversary altercation and assay (or its equivalent) in the accessible sector. The absolute approaches, articular in administering the research, were acclimated to advice anatomy the abject for the adapted agreeable of banking anniversary altercation and analysis. BC16. In some cases an IPSAS permits assertive advice to be included in abstracted letters (e. g. , banking anniversary altercation and analysis) rather than in the banking statements. The IPSASB did not accede it all-important to alike the banking anniversary acknowledgment in the banking anniversary altercation and assay and has appropriately provided advice to that effect. (f) 17 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Forward-Looking Advice BC17. This Accepted does not crave the article to acknowledge advanced information, such as forecasts or projections. However, the IPSASB acclaimed that advice in banking statements additionally has predictive adeptness about the entity’s operations, and that banking anniversary altercation and assay could enhance that ability. For example, advice about an entity’s accident administration policies, and trend analyses of cogent banking anniversary items, may abetment users in assessing the admeasurement to which assets will be accessible to abutment approaching anniversary commitment objectives and the amounts and timing of approaching banknote flows all-important to anniversary and accord absolute claims to the entity’s resources. The IPSASB has appropriately provided advice on how such advice could be included in banking anniversary altercation and analysis. Capricious Accoutrement BC18. The IPSASB bent that a capricious accouterment was adapted to abode the case back an article has acclimated the absolution beneath IPSAS 1 to not accommodate allusive advice in account of the banking statements to which accretion accounting is aboriginal adopted in accordance with IPSASs. This Accepted states that allusive advice should be included in banking anniversary altercation and assay back it is accordant to an compassionate of the accepted period’s banking statements. However, area an article has activated the capricious accouterment in IPSAS 1 it is absurd to accept allusive advice and appropriately it would not be accessible to accommodate such allusive information. 18 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Another Appearance of Mr. Thomas Muller-Marques Berger AV1. This affiliate is of the appearance that ED 47 should crave entities to acknowledge advanced information, such as forecasts or projections. As categorical in the IPSASB’s Conceptual Framework Acknowledgment Draft 1, the objectives of banking advertisement by accessible area entities are to accommodate advice about the article that is advantageous to users of GPFRs for accountability purposes and for controlling purposes. AV2. In the appearance of this member, the accommodation not to crave entities to acknowledge advanced advice does not absolutely accomplish user needs as the cold of controlling is not abundantly addressed. 19 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Accomplishing Guidance This advice accompanies, but is not allotment of, IPSAS XX (ED 47). IG1. The purpose of this Accomplishing Advice is to allegorize assertive aspects of the requirements of IPSAS XX (ED 47). IG2. This Accomplishing Advice is disconnected into three sections as follows: (a) (b) (c) Section A: Qualitative Characteristics of Accepted Purpose Banking Reports— Account to Banking Anniversary Altercation and Analysis; Section B: Examples of Advice about the Entity’s Banking Statements; and Section C: Examples of Advice about Variances and Trends. Section A: Qualitative Characteristics of Accepted Purpose Banking Reports— Account to Banking Anniversary Altercation and Assay A. IG1. Banking anniversary altercation and assay is advised to explain the cogent items, transactions, and contest presented in an entity’s banking statements and the trends and factors that afflicted the banking statements to abetment users to accept the banking statements. It should, therefore, acquire the aforementioned qualitative characteristics as for banking statements declared in IPSAS 1, namely: (a) (b) (c) (d) Understandability; Relevance; Reliability; and Comparability. A. IG2. Banking anniversary altercation and assay should aim to accomplish a antithesis amid the qualitative characteristics to accommodated the objectives of accouterment the information. In some cases, depending on the affairs of the entity, the about accent of a accurate qualitative adapted may be greater than in others. A. IG3. Appliance of the qualitative characteristics to banking anniversary altercation and assay is set out in paragraphs A. IG. 4? A. IG. 20. Understandability A. IG4. Information provided in banking anniversary altercation and assay should be bright and abridged to explain and adapt the circuitous transactions, events, and altitude presented in the banking statements in a bright and simple manner. Banking anniversary altercation and assay is barefaced back it uses descriptions that are not ever technical, does not accommodate boundless detail, and acutely describes those transactions, events, and conditions. Appliance A. IG5. The affairs that are accordant to an article are additionally specific to that entity. Financial anniversary altercation and assay reflects abundant adeptness of the items, transactions, and events, presented in the entity’s banking statements and of the behavior that administer the entity’s 20 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS operations. This agency that banking anniversary altercation and assay may not accommodate some affairs that are absolute to the apparatus of the banking statements set out in IPSAS 1, or it may accommodate some affairs that are not absolute to the banking statements. A. IG6. Financial anniversary altercation and assay needs to be bright and abridged to be useful, appropriately the best important, or material, affairs allegation be called to be included, descriptions should be non-technical, and an adapted but not boundless akin of detail should be provided. Admittance of advice about immaterial items could accomplish the added important advice difficult to find. A. IG7. Generic or “boilerplate” advice that does not chronicle to the specific operations, practices and affairs of the article is absurd to be accordant and should not be included in banking anniversary altercation and analysis. When practicable, duplication of the disclosures fabricated in the addendum to its banking statements should be avoided. Banking anniversary altercation and assay that recites banking anniversary advice afterwards assay or explanations, or presents discussions that do not accommodate acumen into the entity’s accomplished accomplishment is absurd to accommodate advice that is accordant to users of the banking statements, and may actualize an obstacle for users to analyze and accept the best cogent affairs the article faces. For example, annotation on the abridgement that relates accurately to the entity’s banking statements and accepted impacts on the article would be accordant advice for users. A. IG8. Back ambidextrous with qualitative or advanced advice (e. g. , expectations about banking after-effects in the future), it is not about accessible to specify a accordant quantitative beginning aloft which a accurate blazon of advice becomes material. A. IG9. Banking anniversary altercation and assay provides added perspectives and insights about the banking statements, which increases the appliance of the information. Believability A. IG10. Information presented in banking anniversary altercation and assay should be: (a) (b) (c) (d) Based on, and constant with, the basal banking statements; Aloof in discussing both absolute and abrogating facts and views; Based on currently-known facts, decisions, or conditions; and Based on absolute and acceptable assumptions. A. IG11. It is important that advice presented in the banking anniversary altercation and assay is accurate by advice in the banking statements, and does not go above or belie the advice presented in the banking statements. A. IG12. Advice that excludes assertive facts (e. . , negative) is abridged and appropriately could be not neutral. In cases back banking anniversary altercation and assay presents ratios, tables, or charts, they should not alter the advice in the banking statements by, for example, appliance a calibration that exaggerates a absolute or abrogating trend. A. IG13. Banking anniversary altercation and assay should accommodate advice specific to the article and accompanying to that advertisement period. While the advice provided in banking anniversary altercation and assay may reflect advice alfresco of the banking statements (e. g. , 21 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS conomic indicators such as changes in the tax abject or the appliance base), that advice should be accompanying to the advertisement aeon and should be from a reliable source. A. IG14. The basal assumptions and methodologies (including formulae) acclimated to actuate ratios and to adapt tables and archive included in banking anniversary altercation and assay should be appear (e. g. , those acclimated in analyses of trends and variances). In addition, the methodologies adopted in accumulation the information, and the factors and affairs that abutment the altercation and analyses, charge to be transparent. Disclosure of this advice permits users to appraise the believability of the advice provided. A. IG15. Assumptions should be mutually compatible. Assumptions are mutually accordant back they reflect bread-and-butter relationships in the administration (e. g. , absorption rates, appliance rates, GDP). For example, all assumptions that depend on the tax abject for a accustomed approaching aeon would accept the aforementioned tax abject akin in that period. A. IG16. Banking anniversary altercation and assay should acutely call the abject for how the advice is reported, including the assemblage of measurement. For example, in cases back banking anniversary altercation and assay presents ratios, tables, or charts, they should not alter the advice in the banking statements by, for example, appliance a calibration that exaggerates a absolute or abrogating trend. Thus, back banking anniversary altercation and assay contains archive or graphs assuming trends, acknowledgment of the assemblage of altitude is all-important to ensure such advice can be appropriately interpreted. Back such advice is presented, the calibration of such illustrations should be on a abject that anxiously represents the relationships of the items actuality analyzed. A. IG17. In some cases it may not be accessible to verify the accurateness of all qualitative and quantitative explanations of such advice until a approaching period, if at all. For example, if the entity’s action and accident administration are declared in banking anniversary altercation and analysis, such advice would be beneath absolute than, for example, a arrangement afflicted from advice provided in the banking statements. Allegory A. IG18. Advice in banking anniversary altercation and assay should be comparable. Allegory pplies to advice accompanying to altered entities and to the article over periods of time. A. IG19. Allegory is added back banking anniversary altercation and assay is presented on a abject constant with that in above-mentioned years and back the aforementioned attempt and practices are acclimated for anniversary aeon for such items as free ratios and alertness of tables and archive included in banking anniversary altercation and analysis. In addition, acknowledgment of those attempt and practices, including basal assumptions and formulae, is advantageous in interpreting the analyses. Changes to the attempt and practices acclimated to adapt banking anniversary altercation and assay from one aeon to the abutting should be disclosed. A. IG20. Acceptable the inter-period allegory of advice assists users in authoritative and evaluating decisions, abnormally by acceptance the appraisal of trends in banking advice for predictive purposes. In some circumstances, it is absurd to reclassify allusive advice for a accurate above-mentioned aeon to accomplish allegory with the accepted period. For example, abstracts may not accept been calm in the above-mentioned period(s) in a way that allows reclassification, and it may not be accessible to charm the information. 22 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Section B: Examples of Advice about the Entity’s Banking Statements This Accomplishing Advice includes advice on how an article may adapt and present banking anniversary altercation and assay that includes advice about all cogent items, transactions, and contest presented in the banking statements that are best accordant to acceptable users’ compassionate of the banking statements. Banking Position B. IG1. Advice about the banking position will advice users to analyze the assets of the article that can be acclimated to accommodate accurate casework in approaching periods and claims to those assets at the advertisement date. This will accommodate advice advantageous as ascribe to assessments of such affairs as: ? ? ? The admeasurement to which the article has absolved its responsibilities for administration and managing its resources; The admeasurement to which assets are accessible to abutment approaching anniversary commitment objectives; and The amounts and timing of approaching banknote flows all-important to anniversary and accord absolute claims to the entity’s resources. Financial Assets B. IG2. Banking anniversary altercation and assay may accommodate the afterward advice pertaining to an entity’s banking assets: (a) (b) (c) (d) (e) (f) (g) Changes in banking assets to allegorize animation in the sources of funds; Accoutrement for accommodation losses; The ante of acknowledgment on investment; Composition of investments; A government's advance in GBEs as a allotment of the absolute banking assets; Taxes receivable to absolute tax revenues; and Restricted and appointed assets set abreast for specific purposes. Property, Plant, and Accessories B. IG3. Banking anniversary altercation and assay may accommodate the afterward advice pertaining to an entity’s property, plant, and equipment: (a) An assay of adapted maintenance, including approaching amount requirements for aliment and replacement, to acquiesce users to accomplish abreast decisions apropos the adeptness of the basic assets to sustain and accommodate casework in the future; An assay of the change in the net book amount of property, plant, and accessories by above chic and an anniversary of what the net book amount and changes in it beggarly (e. g. a description of why the net book amount has added or decreased is advantageous in compassionate asset backup and usage); (b) 23 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS (c) (d) The boilerplate age and boilerplate advantageous activity for anniversary chic of property, plant, and equipment; and An appraisal of the assets’ concrete action agitated out by a abstruse able in such assessments. B. IG4. Asset administration systems may accommodate advice about an asset's concrete condition, but the absence of an asset administration arrangement does not necessarily avert advertisement on the concrete condition. B. IG5. Asset action appraisal methodologies and abundance of assessments can be altered for above classes of property, plant, and equipment. For example, they could be altered for bridges back compared to buildings. B. IG6. It may not be accessible to complete a concrete assay of all items of property, plant, and equipment. However, the concrete action could be estimated based on a aggregate of factors including, for example, age, architecture abstracts and methods, break per kilometer, geological, and clay conditions. B. IG7. Banking anniversary altercation and assay may accommodate the boilerplate age and either the boilerplate actual advantageous activity or estimated boilerplate advantageous activity of property, plant, and accessories in anniversary above class. Advice about the boilerplate age and the advantageous activity allows users to appraise the timing of rehabilitation and backup expenditures. B. IG8. Banking anniversary altercation and assay may accommodate a description and the abundance of the above apparatus of property, plant, and accessories in anniversary above chic of asset. Providing this advice gives users an compassionate of the attributes and admeasurement of the banal of property, plant, and equipment. B. IG9. The abundance could be based on a assemblage of altitude that represents the accepted characteristics of the chic of property, plant, and accessories actuality adjourned or apparatus thereof (e. g. , lanes or kilometers for roads, kilometers of pipes for avenue for baptize systems, or the cardinal of baptize assay plants). This arbitrary akin assemblage of admeasurement provides users with a advertence that is advantageous in assessing the consequence of the classes and apparatus of items of property, plant, and equipment. B. IG10. The advice adapted to advance a bigger compassionate of an entity’s property, plant, and accessories explains advice in the banking statements. Advertisement on the concrete action of property, plant, and accessories assists users back assessing: (a) (b) (c) (d) The furnishings on anniversary abeyant of accomplished ability allocation and allotment decisions; The trends in the concrete condition; The capability of absolute maintenance, backup and face-lifting funding; and The admeasurement of accepted and approaching revenues bare to maintain, renew, and alter property, plant, and equipment. Other Assets B. IG11. Banking anniversary altercation and assay may accommodate the afterward advice pertaining to an entity’s another assets, to the admeasurement they are absolute (e. g. , inventories of supplies—see IPSAS 12, Inventories, and prepaid expenses): 24 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS (a) (b) Liabilities The nature, admeasurement and purpose of inventories of food (e. g. , aliment materials, cardinal stockpiles, and land/property captivated for resale); and The nature, extent, purpose, and timing of any prepaid items such as insurance. B. IG12. Financial anniversary altercation and assay may accommodate the afterward advice pertaining to an entity’s liabilities: (a) (b) A breakdown of the entity's debt by calm issues against adopted issues. A description of the entity's debt administration behavior and strategies, and the accepted acceding and altitude associated with the debt, including whether the article has complied with any debt covenants. An assay of the entity's absolute debt. Specific ratios or indicators may additionally be advantageous to highlight the consequence of the entity’s debt and the changes in it over time. For example, an assay of the absolute debt outstanding at year end to the absolute liabilities of the article may be provided. The appulse of the debt application cost, bidding as accessible debt accuse to revenues, may additionally be included. An appraisal of any unfunded retirement and another appliance or column appliance account liabilities. This may accommodate a altercation accompanying to the timing of back the unfunded accountability needs to be provided for. An assay of revenues that are not becoming at the end of the aeon including the acceding and altitude (e. g. , commitments) associated with them. The article is not advantaged to these revenues until it performs specific accomplishments as categorical in the acceding and altitude of the accompanying arrangement or agreement. For example, in the case of anniversary acknowledgment arrange in which the abettor is compensated by the article acceding it the appropriate to acquire third-party revenues, there may be abundant liabilities of this type. The attributes of banking liabilities beneath anniversary acknowledgment arrangements. An assay of any biconcave funds accessible for the acquittal of abiding liabilities. (c) (d) (e) (f) Net Assets/Equity B. IG13. An assay of net assets/equity provides users with advice accordant in assessing the entity's all-embracing banking position, and whether it has bigger or deteriorated. Accouterment cogent explanations and a trend assay accompanying to the net assets/equity provides users with an adumbration as to whether the entity’s liabilities are growing and allows them to accomplish assessments about whether accepted levels of taxes or another accuse are acceptable to advance the aggregate and affection of casework currently provided or to undertake any planned enhancements. For example, explanations and a trend assay accompanying to the assets/equity may announce to users that while debt is growing, the article is accumulating resources, such as property, plant, and equipment. Banking Accomplishment B. IG14. Advice about the banking accomplishment will acquaint assessments of affairs such as whether the article has acquired assets economically, and acclimated them calmly and finer to accomplish its anniversary commitment objectives. Advice about the costs of anniversary 25 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS commitment and the amounts and sources of amount accretion during the advertisement aeon will accredit users to actuate whether operating costs were recovered from, for example, taxes, user charges, contributions and transfers or were financed by accretion the akin of acknowledgment of the entity. B. IG15. Any currently-known altitude that accept decidedly afflicted revenues or costs in the accepted period, as able-bodied as those that may appulse approaching evenues or expenses, should be appear to abetment users in free trends. Revenues B. IG16. Banking anniversary altercation and assay may accommodate the afterward advice pertaining to an entity’s revenues: (a) (b) An overview of absolute revenues by above antecedent to announce trends and dependencies on specific sources. Ratios may additionally be provided to highlight the akin of assurance the article has on accurate sources of revenues, for example: (i) (ii) (c) Public-to-public transfers to revenues generated by the article (e. g. taxes, user fees, licences); and Revenues generated by the article as a allotment of absolute revenues. The appulse of the of government business

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