Global Standards for the world economy

Friday 22 November 2019

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The Board discussed two proposed subtotals in the statement(s) of financial performance, as well as guidance on classification, aggregation and disaggregation in its March 2017 meeting.

 21 March 2017


The Board met on 21 March 2017 to discuss the Primary Financial Statements project. The Board discussed two proposed subtotals in the statement(s) of financial performance, as well as guidance on classification, aggregation and disaggregation.

Earnings before interest and tax (Agenda Paper 21A)

The Board agreed (by consensus) that the staff should continue to explore:

  1. requiring the presentation of an earnings before interest and tax (EBIT) subtotal in the statement(s) of financial performance;
  2. defining EBIT as profit before finance income/expenses and tax; and
  3. describing finance income/expenses as income/expenses related to the entity’s capital structure.

The Board asked the staff to consider:

  1. how to define an entity’s capital structure; and
  2. whether additional guidance would be needed on the treatment of particular items of income and expense (for example, the net interest on net defined benefit liabilities and income/expenses from investments).

Management operating performance measure (Agenda Paper 21B)

The Board agreed (by consensus) that the staff should continue to explore:

  1. requiring the presentation of a management operating performance measure, rather than seeking to define operating profit, in the statement(s) of financial performance;
  2. allowing items to be excluded from the management operating performance measure as long as the subtotal meets the requirements in existing paragraphs 85, 85A and 85B of IAS 1 Presentation of Financial Statements; and
  3. requiring additional disclosures to provide transparency around presentation of the management operating performance measure.

General guidance on classification, aggregation and disaggregation (Agenda Paper 21C)

The Board tentatively decided to develop, along the lines suggested in Agenda Paper 21C:

  1. principles for aggregation and disaggregation in the financial statements;
  2. definitions of the notions ‘classification’, ‘aggregation’ and ‘disaggregation; and
  3. guidance on the steps involved in applying ‘classification’, ‘aggregation’ and ‘disaggregation’ when preparing financial statements.

Ten Board members agreed and two disagreed with this decision.

The Board tentatively decided to explore providing more guidance on aggregation characteristics. Eleven Board members agreed and one disagreed.

Next steps

At future meetings the Board will discuss items the staff was asked to develop further or to clarify in the proposals presented at this meeting. The staff will also explore:

  1. adjusted basic earnings per share;
  2. better ways to communicate information about other comprehensive income;
  3. presentation of the results of associates and joint ventures;
  4. targeted improvements in the statement of cash flows; and
  5. development of illustrative examples, including those for specific industries (eg financial institutions), for the primary financial statements.