IASB Issues Revised IFRS Practice Statement 1 Management Commentary

Posted 01 August 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The International Accounting Standards Board (IASB) has issued a revised IFRS Practice Statement 1 Management Commentary to enhance the quality and global alignment of narrative reports accompanying financial statements.

In accordance with the standard-setting procedures of the IFRS Foundation, the International Accounting Standards Board (IASB) has published the revised IFRS Practice Statement 1 Management Commentary. This revision represents a comprehensive overhaul intended to address investor concerns regarding the focus and quality of information provided in narrative reports. The statement serves as a global benchmark for regulators to update national requirements and provides a framework for companies to meet evolving information needs.

The IASB developed this revised statement in collaboration with the International Sustainability Standards Board (ISSB). This partnership aims to facilitate the connectivity of information between financial statements and sustainability disclosures. The updated framework also incorporates innovations from the Integrated Reporting Framework to ensure a cohesive approach to corporate reporting.

Key Objectives of the Revised Practice Statement

  • To provide a comprehensive resource for companies to communicate the factors that affect their ability to create value and generate cash flows.
  • To align narrative reporting with ISSB Standards, ensuring that sustainability-related risks and opportunities are integrated into the management commentary.
  • To improve the consistency and comparability of management commentary across different jurisdictions.
  • To support regulators in developing or updating national guidance for narrative reporting.

The ISSB has also issued a supporting statement regarding the use of ISSB Standards in conjunction with the revised Management Commentary Practice Statement, which can be accessed at this link.

Click here to download the 117-page IFRS Practice Statement 1 Management Commentary: IASB-PS2025-1.pdf

What this means for you, your business, or your clients

  • For yourself: You must update your technical knowledge of narrative reporting standards to ensure your advisory services align with the new global benchmark for management commentary and connectivity with sustainability disclosures.
  • For your business: Audit and accounting firms should review internal reporting templates and quality control procedures to incorporate the revised Practice Statement requirements for clients who adopt this framework.
  • For your clients: Entities preparing financial statements will need to integrate sustainability-related disclosures and financial performance narratives more cohesively, which may require implementing new data collection and reporting processes.

Originally published at https://accountingacademy.co.za/news/read/iasb-revised-ifrs-practice-statement-1-management-commentary

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