Explanation by Omission
A pattern in MD&A narrative writing where a segment, line item, or risk factor that received prominent discussion in prior quarters is briefly mentioned or skipped entirely in the current quarter. The absence is itself the signal — performance probably moved against narrative, and management has elected to focus the reader's attention elsewhere. The diagnostic is to read each quarter's MD&A against the prior two quarters and flag every topic that lost narrative prominence; then check the segment footnote or risk-factor disclosure to see whether the underlying numbers explain the silence. The technique is the most common form of MD&A misdirection and one of the highest-leverage uses of disclosure available to careful investors.
Lessons that use this term
Related terms
Business · CEO Pay Ratio · Conflict of Interest · Fair Dealing · Form 4 · GIPS
Open this term in the app → — no account needed; browse the full glossary while you research.