The International Accounting Standards Board proposed changes to financial statements aimed at making them more comparable, and at bringing greater transparency to “non-GAAP” measures.
“These proposals represent a game-changer in the comparability and usefulness of financial statements,” IASB Chairman Hans Hoogervorst said in a statement.
Developed as part of the boards Primary Financial Statements Project, the proposals cover three main areas:
Courtesy of IFRS Foundation
- New subtotals in P&L: Three new profit subtotals would be required in the statement of profit and loss, including “operating profit,” which is not currently defined under International Financial Reporting Standards.
- “Non-GAAP” measurements: This would require managers to reveal their management performance measure that are not specified in IFRS in a single note. The note would have to explain how the measures are calculated and how they’re useful, and to provide a reconciliation to the most comparable profit subtotal under IFRS.
- Improved disaggregation: New guidance would help companies unbundle reported information, and they would be required to include better analysis of operating expenses, and to identify and explain any “unusual” income of expenses.
Together, they would result in a new IFRS standard on general presentation and disclosure requirements, which would replace IAS 1, “Presentation of Financial Statements.”
The proposals are available in here:
Comments are due by June 30, 2020.
