Management's discussion and analysis to provide an overview of the government's financial activities. MD&A should include a comparison of the current year to the prior year and its analysis, both positive and negative, of significant changes in funds and significant budget variances.

Reasons for these changes and any economic factors that may have played a role in these changes should also be addressed. Emphasis should be placed on the current year. A description of significant capital asset and long-term debt activity during the year, including a discussion of commitments made for capital expenditures, credit ratings, and debt limitations that may affect the financing of planned facilities or services should be addressed.

Finally, present a descriptive analysis of known facts or conditions that will have a significant effect on the financial position or will impact results in operation.

Note: If this is the first period that this Statement is applied, governments are not required to restate prior periods for purposes of providing the comparative data. When prior-year information is available, a comparative analysis of government-wide data will be presented.

During the transition period, governments should disclose a description of the infrastructure assets being reported and of those that are not.

If determining the actual historical cost of general infrastructure assets is not practical, governments should report the estimated historical cost for major general infrastructure assets that were acquired or significantly reconstructed, or that received significant improvements, in fiscal years ending after June 30, 1980. Historical costs should be used if these type assets are acquired after the effective dates of this Statement.