Company operating profit figures to be standardised by 2027

Companies will have to publish standardised operating profit figures from 2027. This is a new requirement from the International Accounting Standards Board (IASB). The IASB writes book-keeping rules for companies across 147 countries. The aim is to end the discretion of companies to decide what constitutes operating profit in their income statement. Currently, many companies report earnings before interest, taxes, depreciation, and amortisation (EBITDA), a figure that is not defined under IASB rules and can be compiled in different ways. The new IASB rules define mandatory sub-totals for operating profit, which will include depreciation, amortisation, and impairment on goodwill, and profit before financing and income taxes. Common adjustments, such as for currency fluctuations, can only be included in footnotes to the statement.

iBOSS Comment:

All good accountants will be aware of this and will ensure compliance as required.