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Exposure Draft: General Presentation and Disclosures (Comment Period Revised April 2020)

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Exposure Draft: General Presentation and Disclosures (Comment Period Revised April 2020) December 2019 IFRS® Standards Exposure Draft ED/2019/7 General Presentation and Disclosures Comments to be received by 30 September 2020 Comment deadline changed from 30 June 2020 because of the covid-19 pandemic Exposure Draft General Presentation and Disclosures Comments to be received by 30 September 2020 Comment deadline changed from 30 June 2020 because of the covid-19 pandemic Exposure Draft ED/2019/7 General Presentation and Disclosures is published by the International Accounting Standards Board (Board) for comment only. The proposals may be modified in the light of comments received before being issued in final form. Comments need to be received by 30 September 2020 and should be submitted in writing to the address below, by email to [email protected] or electronically using our ‘Open for comment documents’ page at: https://www.ifrs.org/projects/ open-for-comment/. All comments will be on the public record and posted on our website at www.ifrs.org unless the respondent requests confidentiality. Such requests will not normally be granted unless supported by good reason, for example, commercial confidence. Please see our website for details on this and how we use your personal data. Disclaimer: To the extent permitted by applicable law, the Board and the IFRS Foundation (Foundation) expressly disclaim all liability howsoever arising from this publication or any translation thereof whether in contract, tort or otherwise to any person in respect of any claims or losses of any nature including direct, indirect, incidental or consequential loss, punitive damages, penalties or costs. Information contained in this publication does not constitute advice and should not be substituted for the services of an appropriately qualified professional. ISBN for this part: 978-1-911629-63-4 ISBN for complete publication (three parts): 978-1-911629-62-7 Copyright © 2019 IFRS Foundation All rights reserved. Reproduction and use rights are strictly limited. Please contact the Foundation for further details at [email protected]. Copies of Board publications may be obtained from the Foundation’s Publications Department. Please address publication and copyright matters to [email protected] or visit our webshop at http:// shop.ifrs.org. ® ® The Foundation has trade marks registered around the world (Marks) including ‘IAS ’, ‘IASB ’, the ® ® ® ® ® ® ‘IASB logo’, ‘IFRIC ’, ‘IFRS ’, the IFRS logo, ‘IFRS for SMEs ’, the IFRS for SMEs logo, the ‘Hexagon ® ® Device’, ‘International Accounting Standards ’, ‘International Financial Reporting Standards ’, ‘IFRS ® ® Taxonomy ’ and ‘SIC ’. Further details of the Foundation’s Marks are available from the Foundation on request. The Foundation is a not-for-profit corporation under the General Corporation Law of the State of Delaware, USA and operates in England and Wales as an overseas company (Company number: FC023235) with its principal office in the Columbus Building, 7 Westferry Circus, Canary Wharf, London, E14 4HD. GENERAL PRESENTATION AND DISCLOSURES CONTENTS from paragraph INTRODUCTION INVITATION TO COMMENT [DRAFT] INTERNATIONAL FINANCIAL REPORTING STANDARD X GENERAL PRESENTATION AND DISCLOSURES OBJECTIVE 1 SCOPE 2 COMPLETE SET OF FINANCIAL STATEMENTS 10 IDENTIFICATION OF THE FINANCIAL STATEMENTS 16 GENERAL PRESENTATION AND DISCLOSURE REQUIREMENTS 19 Objective of the financial statements and roles of the primary financial statements and the notes 19 Aggregation and disaggregation 25 Offsetting 29 Frequency of reporting 31 Consistency of presentation, disclosure and classification 33 Comparative information 34 Line items and subtotals 42 STATEMENT(S) OF FINANCIAL PERFORMANCE 44 Statement of profit or loss 44 Statement presenting comprehensive income 73 STATEMENT OF FINANCIAL POSITION 82 Line items to be presented in the statement of financial position 82 Classification of assets and liabilities as current or non-current 84 STATEMENT OF CHANGES IN EQUITY 89 Information to be presented in the statement of changes in equity 89 Information to be presented in the statement of changes in equity or disclosed in the notes 91 STATEMENT OF CASH FLOWS 95 NOTES 96 Structure 96 Unusual income and expenses 100 Management performance measures 103 Capital 111 Other disclosures 114 EFFECTIVE DATE AND TRANSITION 117 WITHDRAWAL OF IAS 1 120 continued... © IFRS Foundation 3 EXPOSURE DRAFT—DECEMBER 2019 ...continued APPENDICES A Defined terms B Application guidance [DRAFT] AMENDMENTS TO OTHER IFRS STANDARDS TABLE OF CONCORDANCE WITH IAS 1 AND OTHER IFRS STANDARDS APPROVAL BY THE BOARD OF EXPOSURE DRAFT GENERAL PRESENTATION AND DISCLOSURES PUBLISHED IN DECEMBER 2019 BASIS FOR CONCLUSIONS (see separate booklet) ILLUSTRATIVE EXAMPLES (see separate booklet) 4 © IFRS Foundation GENERAL PRESENTATION AND DISCLOSURES Introduction Why is the Board publishing this Exposure Draft? The Exposure Draft includes the proposals of the International Accounting Standards Board (Board) to improve how information is communicated in the financial statements, with a focus on information about performance the statement of profit or loss.1 The Board is proposing limited changes to the statement of cash flows and the statement of financial position. The proposals in the Exposure Draft were developed by the Board as part of its Primary Financial Statements project, which is part of the Board’s work on Better Communication in Financial Reporting. It responds to the strong demand from stakeholders, and in particular users of financial statements, to undertake a project on performance reporting. Structure of the Exposure Draft The Exposure Draft includes: (a) a proposal to replace IAS 1 Presentation of Financial Statements with a new Standard that would comprise: (i) new requirements on presentation and disclosures in the financial statements.2 (ii) requirements brought forward from IAS 1 with only limited changes to the wording. (These changes are not intended to modify any requirements.) (b) proposed amendments to other Standards: (i) IAS 7 Statement of Cash Flows; (ii) IFRS 12 Disclosure of Interests in Other Entities; (iii) IAS 33 Earnings per Share; (iv) IAS 34 Interim Financial Reporting; (v) IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to include some requirements from IAS 1;3 and (vi) IFRS 7 Financial Instruments: Disclosures to include some requirements from IAS 1. 1 This invitation to comment and the Exposure Draft uses the term ‘statement of profit or loss’ to cover both the profit or loss section (when an entity presents its statement(s) of financial performance as a single statement of profit or loss and other comprehensive income) and the statement of profit or loss (when an entity presents its statement(s) of financial performance as a statement of profit or loss and a separate statement presenting comprehensive income). 2 The Board proposes to retain requirements in IAS 7 Statement of Cash Flows that are specific to presentation and disclosures in the statement of cash flows with some amendments. 3 The Exposure Draft also sets out a proposal to change the title of IAS 8 from ‘Accounting Policies, Changes in Accounting Estimates and Errors’ to ‘Basis of Preparation, Accounting Policies, Changes in Accounting Estimates and Errors’. © IFRS Foundation 5 EXPOSURE DRAFT—DECEMBER 2019 Who would be affected by the proposals? The Board expects the proposals in this Exposure Draft to affect all entities that apply IFRS Standards to prepare financial statements. The effect of these proposals will vary between entities. Paragraphs BC232–BC312 of the Basis for Conclusions describe the expected effects of the Board’s proposals in more detail. Next step The Board will consider comment letters and other feedback from its consultations on this Exposure Draft when finalising the project proposals. Invitation to comment The Board invites comments on the project proposals in this Exposure Draft, particularly on the questions set out below. Comments are most helpful if they: (a) address the questions as stated; (b) indicate the specific paragraph(s) to which they relate; (c) contain a clear rationale; (d) identify any wording in the project proposals that is difficult to translate; and (e) include any alternative the Board should consider, if applicable. Respondents need not comment on all the questions. The Board is interested in receiving input on how it has balanced costs and benefits when developing those proposed changes. The Board also welcomes views on whether the project proposals are drafted clearly and whether they reflect the Board’s decisions. The Board is not seeking comments on the requirements that the Board proposes to bring forward from IAS 1 with only limited changes to their wording. However, the Board welcomes views on whether the proposed limited wording changes to these requirements could have unintended consequences. The requirements brought forward from IAS 1 are coloured in grey in the Exposure Draft. A document providing a mark-up of changes to those IAS 1 paragraphs is included in the Exposure Draft package. Structure of the statement of profit or loss Figure 1 is a summary of a statement of profit or loss prepared by an entity applying the project proposals. The entity does not make investments in the course of its main business activities, nor does it provide financing to customers as a main business activity. 6 © IFRS Foundation GENERAL PRESENTATION AND DISCLOSURES Figure 1—Summary of a statement of profit or loss Revenue X Operating Operating expenses (X) Operating profit or loss X
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