The structure of the statement of profit or loss
There is a particular focus on the profit or loss account in IFRS 18. Before looking in detail at the changes, some important concepts have been confirmed in IFRS 18. In particular, all items of income or expense must be reported through profit or loss unless another specific IFRS requires or permits otherwise. The end result of this will be that the total of all income and expenses other than those reported “below the line” in other comprehensive income (or dealt with directly through equity) will result in the operating profit or loss for the reporting period. So far, so straightforward. Where matters become somewhat more interesting is how these should be reported in detail. IFRS 18 requires that items in profit or loss must be classified in one of five groups.
These are:
The operating category. The investing category. The financing category. The income taxes category. The discontinued operations category.
1. 2. 3. 4. 5.
The operating category is a bit of a catch-all category.
In line with IFRS practice in other areas (for example, the distinction between current and non-current assets and liabilities) if an item is not included in one of the four other categories, then it should be included in the operating category. In other words, the operating category is a residual default category.
IFRS 18 | THE STRUCTURE OF THE STATEMENT OF PROFIT OR LOSS
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