CMAC AP 7 Non IFRS Information

International Financial Reporting Standards
Agenda Paper 7
Non-IFRS information
CMAC Meeting
October 2014
The views expressed in this presentation are those of the presenter,

not necessarily those of the IASB or IFRS Foundation.
IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Background
Part of the Disclosure Initiatives Principles of

Disclosure (POD) research project
The POD project is meant to address comments

received during the IASBs Agenda Consultation 2011
To date, the team has reviewed a variety of publications
containing recommendations for the overall
improvement of financial reporting disclosures
As a result we have identified information in a complete
set of IFRS financial statements as one of the POD
research topics, which includes presentation and
disclosure of non-IFRS financial information.
Background continued
The main issues this project aims to address around this

topic are:
(a) What types of information should be considered nonIFRS financial information?
(b) May an entity disclose non-IFRS information in a
complete set of IFRS financial statements?
(c) If yes, where in the financial statements can non-IFRS
disclosures be made- ie can they be made in the primary
financial statements?
Objective of this CMAC session
To hear CMACs views on the inclusion or use of

nonGAAP/non-IFRS financial information as part of
financial statements
what we are referring to here as contradictory
information
Obtain input from CMAC for developing guidance and

clarification about providing supplementary information
in IFRS financial statements
What are the problems with presentation and

disclosure of non-IFRS information?
Efforts by management to show good results could
result in misleading information
Increased complexity
Regulatory guidance on non-IFRS (or non-GAAP)
financial information varies globally, causing
comparability issues
What the team is doing
We are identifying types of financial information

discussed within the context of non-IFRS financial
information (not just performance measures)
We are analysing whether sufficient guidance in IFRS
already exists and helping the Board determine whether
clarifications and/or additional guidance are necessary
We are not developing guidance for financial
information that is not part of financial statements but
that is reported together in the same reporting package
(eg in the annual report)
Distinguishing this type of financial

information
We do not intend to directly define the term non-IFRS

financial information. Instead we are considering
making the following distinction:
IFRS
Required
information
Non-IFRS
Supplementary
information
Contradictory
information
Additional information
Information in financial statements
How might we distinguish what is

additional information?
IFRS does not specify all the disclosures needed in an

entitys financial statements
Much of the information in financial statements could
therefore be viewed as supplementary
Difficult to determine what is supplementary and what is

contradictory
Possible characteristics of additional

information
Supplementary Information
Contradictory information
Recognised and measured in

accordance with IFRS
Not recognised or measured in

accordance with IFRS
Disclosed in accordance with a specified

IFRS disclosure objective/requirement
Not related to a specific disclosure

requirement
Meets objective/role of financial

statements eg information about:
assets, liabilities, income, expense,
equity of the entity
present/past transactions
Meets the broader objective of financial

reporting ie relevant information about:
future transactions and events ie
forecasts, budgets, future purchases or
sales
Fair presentation
Neutral
Clear
Misleading
Undue prominence
Unclear labelling
Types of additional information

often described as non-IFRS
Forward-looking information (eg earnings forecast, backlog)
Performance measures such as EBITDA, free operating cash flows,
underlying earnings
Alternative measures (eg profit or loss on non-IFRS basis)
Pro-forma information
Ratios (eg ROCE, receivables turnover ratio)
Non-financial information (sustainability reporting, information about
industry regulation)
Information labelled as unusual or infrequently occurring
Immaterial information
CMAC members: do you agree with these examples? Do

you have any additional items that are is not in our list?
10
Presentation and disclosure of supplementary

information in financial statements
11
Some supplementary information is widely used in

financial statements and may be simple to understand
(eg total assets)
Other types might demand more details or explanations
(eg EBITDA or its variations)
CMAC members: do you agree with supplementary information

being presented on the face of the financial statements?
Possible examples of contradictory information:

additional columns with alternative measurements
to IFRS standards
2012
In millions of dollars
Note
Before IFRS X
Revenue
12
2011
IFRS X
IFRS
50,000.00
50,000.00
Before IFRS X
IFRS X
IFRS
45,000.00
45,000.00
Cost of sales
20,000.00
9,000.00
- 11,000.00
18,000.00
8,500.00
- 9,500.00
SG&A
10,000.00
- 10,000.00
8,000.00
- 8,000.00
Other operating income
5,000.00 - 3,000.00
- 8,000.00
6,000.00
- 5,000.00
- 11,000.00
13,000.00
16,500.00
900.00
- 4,700.00
Profit before tax
15,000.00
Tax Expense
Profit
21,000.00
5,000.00 - 2,100.00
- 7,100.00
10,000.00
13,900.00
3,800.00
9,200.00
11,800.00

additional columns excluding fair-value
measurements
Note
2012
Before fair value
Fair value
measurements measurements
Revenue
TOTAL
50,000.00
- 50,000.00
Before fair value

measurements
45,000.00
Cost of sales
20,000.00
9,000.00 - 11,000.00
18,000.00
SG&A
10,000.00
- - 10,000.00
8,000.00
5,000.00
- 3,000.00 - 8,000.00
6,000.00
15,000.00
- 21,000.00
5,000.00
- 2,100.00 - 7,100.00
10,000.00
13,900.00
Profit before tax

Tax Expense
Profit
2011
Fair value
measurements
3,800.00
9,200.00
TOTAL
- 45,000.00
8,500.00 9,500.00
- 8,000.00
- 5,000.00 11,000.00
13,000.00
-
13
- 16,500.00
900.00 4,700.00
11,800.00

additional columns excluding exceptional items
14
2012
Revenue
Cost of sales
SG&A
Note
X
X
X
Profit before tax

Tax Expense
Profit
X
X
Before exceptional
items
Exceptional items
TOTAL
50,000.00
-2,000.00
48,000.00
-20,000.00
-10,000.00
-5,000.00
-1,500.00
-2,500.00
- 20,000.00
- 11,500.00
- 7,500.00
15,000.00
9,000.00
-5,000.00
10,000.00
- 5,000.00
4,000.00
CMAC members: do you think these examples are types

of contradictory information? Can you provide other
examples of information you think is contradictory?
Presentation and disclosure of contradictory

information in financial statements
15
Some users find contradictory information relevant

One of the discussions we will bring to the Board is
about placement of contradictory information in IFRS
financial statements
CMAC members: would you be comfortable with this type of

information being presented/disclosed in IFRS financial
statements if clearly labelled as such?
Thank you
16

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International Financial Reporting Standards

The views expressed in this presentation are those of the presenter,

Part of the Disclosure Initiatives Principles of

The POD project is meant to address comments

The main issues this project aims to address around this

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

Objective of this CMAC session

To hear CMACs views on the inclusion or use of

Obtain input from CMAC for developing guidance and

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

What are the problems with presentation and

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

What the team is doing

We are identifying types of financial information

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

Distinguishing this type of financial

We do not intend to directly define the term non-IFRS

Information in financial statements

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

How might we distinguish what is

IFRS does not specify all the disclosures needed in an

Difficult to determine what is supplementary and what is

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

Possible characteristics of additional

Recognised and measured in

Not recognised or measured in

Disclosed in accordance with a specified

Not related to a specific disclosure

Meets objective/role of financial

Meets the broader objective of financial

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

Types of additional information

CMAC members: do you agree with these examples? Do

Presentation and disclosure of supplementary

Some supplementary information is widely used in

CMAC members: do you agree with supplementary information

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

Possible examples of contradictory information:

Other operating income

Profit before tax

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

Possible examples of contradictory information:

Before fair value

Other operating income

Profit before tax

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

Possible examples of contradictory information:

Profit before tax

CMAC members: do you think these examples are types

Presentation and disclosure of contradictory

Some users find contradictory information relevant

CMAC members: would you be comfortable with this type of

IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

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