As you are kindly aware that the Indian Accounting Standards (Ind AS) are based on the IFRS Accounting Standards issued by the International Accounting Standards Board (IASB). In this regard, it may be noted that IFRS Accounting Standards are being issued/revised by the IASB from time to time. As a part of convergence with IFRS Accounting Standards, the Ind AS may be issued/revised corresponding to the IFRS Accounting Standards.

In April 2024, the IASB issued a new IFRS viz. IFRS 18, Presentation and Disclosure in Financial Statements to improve how companies communicate in their financial statements, with a focus on information about financial performance in the profit or loss. IFRS 18 introduces five categories for classifying income and expenses viz. operating, investing, financing, income taxes and discontinued operations. It also requires presentation of new defined subtotals in the profit or loss; disclosures about management-defined performance measures, and enhances principles for grouping (aggregation and disaggregation) of information.

IFRS 18 replaces IAS 1, Presentation of Financial Statements and made consequential amendments to other IFRS Accounting Standards. Requirements in IAS 1 that are unchanged have been transferred to IFRS 18 and other Standards. Globally, IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027. Accordingly, Ind AS 118, Presentation and Disclosure in Financial Statements, has been formulated on the basis of IFRS 18. The proposed effective date of the standard is for annual reporting periods beginning on or after April 1, 2027.

The Accounting Standards Board (ASB) considered the draft of Ind AS 118 and decided to issue Exposure Draft of the said standard.

How to Comment:

Further clarifications on the Exposure Draft may be sought by e-mail to asb@icai.in.