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A short time ago someone asked me if the rumor was true. I asked “What rumor?” He replied, “The one about IFRS forcing public companies to file management reports when they file their financial statements with the Ontario Securities Commission. I thought they had to file Management Discussion and Analysis Reports (MD&A) with their statements. Is there a difference between the two reports? Will they have to file both now? I already have enough work. I don’t need another report to fill out!”

I said I would find out and get back to him.

Here’s what I wrote back in an email to him:

David,

 

I promised you a follow up with regard to “Management Discussion and Analysis” vs. “Management Report.” I think I can shed some light on this.

 

I spoke with the Ontario Securities Commission. They said that “Management Discussion and Analysis” was still the right name for the report that must accompany public company financial statements in Canada. Their documentation defines MD&A as follows: “MD&A” means management’s discussion and analysis of the financial condition and results of operations prepared in accordance with Ontario securities law…” There is no mention of “Management Reports.”

 

Here is where I think the confusion comes in. The IASB meeting agendas show that they are looking at adding MD&A type reports to their financial statement requirements as part of the accounting standards, but they seem to call theses possible add-ons “Management Reports.” But for now, there is no such requirement as part of IFRS for Canada. For now, the IASB is leaving these requirements up to each individual security exchange.

 

The conclusion I draw from this is that MD&A’s are still called MD&A’s in Canada and that they are still the specific reports that must accompany a public company’s financial statements. The Ontario Securities Commission is not requiring “Management Reports” to be filed as part of the process for filing financial statements, only MD&A’s…for now.”

 

Perhaps we should keep an eye on this one…

 

Mike Morley is a Certified Public Accountant, consultant, speaker and author of several books including “IFRS Simplified”, “Sarbanes-Oxley Simplified”, Financial Statement Analysis Simplified”, and “Credit for Canadians”, now available on Amazon as E-books and print books.  If you would like to learn more about IFRS and what these standards will mean for companies, go to www.mikemorley.com or call Mike at 647-558-6832 or email mike@mikemorley.com