Regulatory Guide 247 - Effective disclosure in an operating and financial review CPD
This guide is for listed entities and their directors. It sets out ASIC’s guidance for directors on providing useful and meaningful information to shareholders or unit holders when preparing an operating and financial review (OFR) in a directors’ report.
An operating and financial review (OFR) is a key part of annual reporting by listed entities. It must set out information that shareholders or unit holders would reasonably require to assess an entity’s operations, financial position, and business strategies and prospects for future financial years. This information complements and supports the financial report.
A high-quality OFR is important in meeting the information needs of shareholders and unit holders.
This regulatory guide is designed to assist the directors of listed entities to provide a useful and meaningful OFR.
An operating and financial review is designed to enhance the periodic financial reporting regime so that other useful and meaningful information can be made available regularly for the benefit of shareholders.
An OFR should:
• Contain key information about an entity’s operations and financial position, discuss the impact of relevant events throughout the reporting period and provide an overview of business strategies and prospects (RG 247.25–RG 247.27);
• Present a narrative and analysis about the entity’s results and financial position (RG 247.28–RG 247.30); and
• Contain information that shareholders would reasonably require to make an informed assessment of the entity’s operations, financial position, and business strategies and prospects for future financial years (RG 247.31–RG 247.33).
Information about an entity’s operations involves an explanation of the underlying drivers of its results, and of key developments in the reporting period. An OFR should also discuss significant factors affecting the entity’s results.