SOCPA Shares Remarks on IASB's Draft on "General Presentation and Disclosures"
IASB published a draft to amend IFRS 1 '"General Presentation and Disclosures". The draft included substantial changes in relation to income, in addition to a number of requirements, including the disclosure of unusual transactions and the disclosure of management performance measures.
SOCPA, represented by its Accounting Standards Committee, participated in the commentary on the draft and expressed its general support for the proposed classification of income, but stressed the importance of defining the operating category directly with link to the entity’s main course of operation, rather than being “residual income”.
SOCPA also made a number of proposals with regard to investment or financing. SOCPA stressed the importance of standardizing line items of financial statement items to reflect their meaning and to facilitate comparability.
With regard to aggregation, disaggregation, and disclosure, SOCPA asserted the importance of considering the nature of transactions, not only its type, when deciding to apply aggregation or disaggregation.
With regard to the definition of unusual items, SOCPA submitted its proposal while considering the relevance of the term with the definition of extraordinary items that previously existed in standards.
With regard to management performance measures, SOCPA expressed its reservation, as it may cause issues in comparing different entities, undermining one of the most important qualitative characteristics of accounting information; comparability.
SOCPA believes that any requirements for such measurements may be better issued by regulators such as capital markets, as they are widely used in advertisements published by these entities.