Financial reporting is a means of communicating decision-useful information. The objective of financial reporting is to provide information that is useful to present and potential investors and creditors and others in making investment, credit and similar resource allocation decisions. This objective pertains to all of financial reporting, not just financial statements (IASB, 2006). The purpose of the paper is to assess the latest developments regarding the qualitative characteristics (QC’s) of financial reporting. The QC’s discussed in this paper distinguish more useful information from less useful information. Being the qualities to be sought in making decisions about financial reporting the QC’s of the following pronouncements are evaluated and compared in this paper: (1) the QC’s of financial reporting according to the International Accounting Standard Board (IASB) Framework Discussion Paper of 2006; (2) the QC’s of the IASB’s Management Commentary Discussion Paper of 2005; and (3) the principles ensuring quality of information in the Sustainability Reporting Framework of the Global Reporting Initiatives (GRI) G3 of 2006. Future developments relating to financial reporting might have an impact on setting the QC’s for financial reporting, including management commentary, are also investigated. This paper demonstrates that the debate is far from over.

Financial reporting is a means of communicating decision-useful information. The objective of financial reporting is to provide information that is useful to present and potential investors and creditors and others in making investment, credit and similar resource allocation decisions. This objectiv...