You might recognise the categories of operating, investing and financing as be - ing consistent with those already used by IAS 7 on cash flow statements; and there is indeed a tweak to IAS 7 as a result of the release of IFRS 18. Previously there was more flexibility in terms of which group to put cash flows from dividends and interest paid and received in. Interest payments for example would now go under the financing category in the profit or loss category, whereas IAS 7 previously permitted inclusion in any of the operating, investing or financing activities, depending on the context, provided that the entity reported them consistently when comparing one period to the next.
There are also important differences to the way in which sub-totals are presented in the income statement.
Two new sub-totals are required:
Operating profit. Profit before financing and income taxes.
1. 2.
Press releases which accompany the publication of IFRS 18 make a bold claim: “ IFRS 18 will improve communication in the financial statements
IFRS Press Release April 2024
IFRS 18 | THE STRUCTURE OF THE STATEMENT OF PROFIT OR LOSS
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