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17. December 2019

IASB proposes ED/2019/7 General Presentation and Disclosures

Today, the IASB has published for public comment the Exposure Draft ED/2019/7 General Presentation and Disclosures (further information).

The Board is proposing improvements to the structure and content of the primary financial statements, with a focus on the statement(s) of financial performance. In particular, the IASB proposes to:

  • Introduce defined subtotals and categories in the statement of profit or loss
  • Introduce requirements to improve aggregation and disaggregation
  • Introduce Management Performance Measures (MPMs) and accompanying disclosures in financial statements
  • Introduce targeted improvements to the statement of cash flows (i.e. reduction of presentation choices)

The proposed changes are resulting from the feedback the Board had received on its 2015 Agenda Consultation (further information).

One of the findings was that the structure and content of the statement(s) of financial performance varies even among entities in the same industry. Users of financial statements would like more comparability in the statement(s) of financial performance and would welcome more defined subtotals and line items in that statement. Companies use different performance measures in their financial statements, often without clarifying what information is included in or excluded from such measures. This means that investors and regulators cannot easily compare companies’ financial performances.

Comments can be submitted to the IASB until 30 June 2020.