SHOW SECTIONS

Current stage

The Board began to redeliberate proposals in the Exposure Draft General Presentation and Disclosures in March 2021. The Exposure Draft, published in December 2019, proposes to improve how information is communicated in the financial statements, with a focus on information in the statement of profit or loss. The Board discussed feedback on the Exposure Draft in December 2020 and January 2021.

IASB® Update March 2021

The Board met on 24 March 2021 to begin redeliberating the proposals in the Exposure Draft General Presentation and Disclosures relating to:

  • subtotals and categories in the statement of profit or loss, by discussing the requirement for, and the definition of, operating profit—Agenda Paper 21A;
  • management performance measures, including the potential expansion of their scope beyond income and expense subtotals—Agenda Paper 21B; and
  • amendments to the statement of cash flows, including the scope of amendments and some of the specific proposals—Agenda Paper 21C.

Subtotals in the statement of profit or loss—operating profit (Agenda Paper 21A)

The Board tentatively decided to:

  1. require an entity to present an operating profit subtotal in the statement of profit or loss. All 13 Board members agreed with this decision.
  2. confirm these types of income and expenses shall not be classified in the operating category:
    1. investing;
    2. financing;
    3. income tax; and
    4. discontinued operations.

    All 13 Board members agreed with this decision. The Board will discuss at a future meeting the precise definition of the investing and financing categories including how they apply to entities for which investing and financing are main business activities (such as banks and other financial institutions).

  3. confirm that the operating category:
    1. comprises all income and expenses arising from an entity’s operations, including volatile and unusual income and expenses arising from an entity’s operations; and
    2. includes, but is not limited to, income and expenses from an entity’s main business activities.

    All 13 Board members agreed with this decision.

  4. not develop a direct definition of operating profit.
    All 13 Board members agreed with this decision.

Scope of management performance measures (Agenda Paper 21B)

The Board tentatively decided to:

  1. require an entity to include information about management performance measures in the financial statements. All 13 Board members agreed with this decision.
  2. explore possible approaches to expanding the scope of the requirements relating to management performance measures to include measures other than subtotals of income and expenses. Ten of 13 Board members agreed with this decision.

The Board also discussed possible approaches for expanding the scope of management performance measures and factors for evaluating them. The Board was not asked to make any decisions.

Statement of cash flows (Agenda Paper 21C)

The Board tentatively decided to:

  1. maintain the scope of its work relating to the statement of cash flows in this project. All 13 Board members agreed with this decision.
  2. require an entity to use the operating profit or loss subtotal as the starting point for the indirect method of reporting cash flows from operating activities. All 13 Board members agreed with this decision.
  3. proceed with the proposals in the Exposure Draft relating to the classification of interest paid and dividend cash flows for entities other than those for which investing and financing are main business activities. Accordingly:
    1. interest and dividends paid would be classified as cash flows arising from financing activities; and
    2. dividends received would be classified as cash flows arising from investing activities.

    All 13 Board members agreed with this decision. The Board will discuss the classification of interest received at a future Board meeting when it will also discuss definitions of investing and financing in the statement of profit or loss.

Next milestone

IFRS Standard


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