(a)  The general considerations of financial statement discussion and analysis under the RPS 2 are that:

• Information provided in financial statement discussion and analysis should meet the qualitative characteristics (QCs) of financial reporting taking into accounts the constraints on information included in general purpose financial reporting.
• Financial statement discussion and analysis should not be a mere repetition of information already provided in the financial statement but to analyze and explain the significant items, transactions and events in the financial statement.
• Financial statement discussion and analysis should be presented at least annually and should use the same reporting period as that covered by the financial statements.
• The reporting boundary for financial statement discussion and analysis should be the same as that used for the financial statements.
• Financial statement discussion and analysis should be issued together with the financial statements.
• Financial statement discussion and analysis should be clearly identified and distinguished from the financial statements and other information.                                                                                                                                                                                                                                                                                                                                                                                                                          (b)

  Financial statement discussion and analysis should include the following, without merely replicating information in the financial statements:

  • An overview of the entity’s operations and the environment in which it operates, including mission and vision, governance, significant relationships of the entity e.g. funding arrangements, changes in the legal, political, social and economic environment that affect the operation of the entity and primary operations of the entity.
  • Information about the entity’s objectives and strategies including significant changes in the entity’s objectives and strategies in the reporting period.
  • An analysis of the entity’s financial statements including significant changes and trends in an entity’s financial position, financial performance and cash flows; and
  • A description of the entity’s principal risks and uncertainties that affect its financial position, financial performance and cash flows, an explanation of changes in those risks and uncertainties since the last reporting date and its strategies for bearing or mitigating those risks and uncertainties.