Washington (Dec. 31, 2003) -- The Securities and Exchange Commission has issued guidance regarding management's discussion and analysis of financial condition and results of operations (MD&A) presented in reporting companies’ disclosure documents.

The commission said the guidance doesn’t create new legal requirements or modify existing requirements, but aims to elicit more informative and transparent MD&A.

The interpretive release provides guidance regarding: the overall presentation and focus of MD&A; analysis of financial information; known material trends and uncertainties; key performance indicators, including non-financial indicators; liquidity and capital resources; and critical accounting estimates. The release is available online at http://www.sec.gov/rules/interp/33-8350.htm under "Regulatory Actions/Interpretive Releases."

According to the SEC, the guidance emphasizes that MD&A shouldn’t be “merely a recitation of financial statements in narrative form or an otherwise uninformative series of technical responses” to MD&A requirements, and encourages top-level management involvement in the drafting of MD&A.

-- WebCPA staff

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