Agenda decision

High-level overview

Scope of the Requirement to Disclose Expenses by Nature

Addresses whether the requirement to disclose certain expenses by nature (see paragraph 83) apply:

A.     only when an entity presents operating expenses by function in the operating category of the statement of profit or loss (see paragraph 75(a)(ii)); or

B.     when an entity presents any expense by function in the operating category.

The final agenda decision concludes that these requirements apply when an entity presents any expense by function in the operating category (View B).

Classification of a Foreign Exchange Difference from an Intragroup Monetary Liability (or Asset)

Addresses how an entity applying paragraph B65 classifies a foreign exchange difference if the income and expenses from the intragroup monetary liability (or asset) giving rise to the difference have been eliminated on consolidation.

The agenda decision contains two views:

1.     Classify the exchange difference in the operating category as the default category; or

2.     Classify the difference in the same category in which the income and expenses from the intragroup loan would have been classified before their elimination on consolidation (or, if doing so would involve undue cost or effort, in the operating category).

The final agenda decision concludes that an entity should make an accounting policy choice between View 1 or View 2.

Classification of Gains and Losses on a Derivative Managing a Foreign Currency Exposure

Addresses how an entity applies the requirements in paragraphs B70-B76 to classify gains or losses in its consolidated profit or loss relating to the following type of derivative financial instrument:

·        A forward contract used to manage the foreign currency risk of a net liability exposure; but

·        Is not designated as a hedging instrument applying IFRS 9 Financial Instruments.

The final agenda decision concludes that the entity is required to classify any gain or loss on the derivative in the same category as the income and expenses affected by the risks the derivative is used to manage.

Assessment of a Specified Main Business Activity for the Purposes of the Separate Financial Statements of a Parent

Addresses how a parent assesses, for the purposes of its separate financial statements, whether it has a specified main business activity of investing in unconsolidated subsidiaries.

Tentative agenda decision

High-level overview

Assessment of Specified Main Business Activities for a Manufacturer-Lessor

Considers how an entity that is a manufacturer-lessor assesses whether, applying IFRS 18, the entity’s aggregated lease activity, comprising its finance lease and operating lease activities, is a main business activity of providing financing to customers.

Classification of Income and Expenses from Cash and Cash Equivalents

Considers how an entity classifies income and expenses from cash and cash equivalents in its consolidated statement of profit or loss if the entity has, alongside other business activities, a main business activity of:

·        investing in financial assets within the scope of paragraph 53(c) of IFRS 18; and

·        providing financing to customers.

Classification of Income and Expenses when an Entity Has a Main Business Activity of Providing Financing to Customers

Considers how an entity that has a main business activity of providing financing to customers classifies income and expenses from liabilities that arise from transactions that involve only the raising of finance in its consolidated statement of profit or loss in accordance with paragraphs 65(a) and 66 of IFRS 18.

Labels of Subtotals

Considers the labelling of a subtotal in an entity’s statement of profit or loss, when that subtotal is also a management-defined performance measure (referred to as ‘the measure’).

In particular, the request asked whether the label of the measure is required to explicitly list all the elements excluded from (or included in) the measure.

Management-defined Performance Measures - Hypothetical Income and Expenses

Considers whether a performance measure that includes hypothetical income and expenses can meet the definition of a management-defined performance measure in paragraph 117 of IFRS 18.

The request describes hypothetical income and expenses as income and expenses that an entity has not recognised and will never recognise in its statement of financial performance applying IFRS Accounting Standards.

Management-defined Performance Measures - Public Communications

Considers whether presentations provided on a confidential basis to a small number of identifiable shareholders or potential investors are public communications for the purpose of identifying a management-defined performance measure applying IFRS 18.

Presentation of Operating Expenses

Considers:

·       when an entity is required to use a ‘mixed presentation’—that is, a presentation in which an entity classifies and presents in line items in the statement of profit or loss some operating expenses based on their nature and others based on their function within the entity—applying paragraph 78 of IFRS 18; and

·       whether an entity can disaggregate expenses of the same nature and classify and present some of those expenses in line items comprising operating expenses aggregated on the basis of nature and others in line items comprising operating expenses aggregated on the basis of function.