Changes in the Statement of profits and loss in according to IFRS 18 and their impact on the development of NAS

Abstract

Introduction. The International Accounting Standards Board continues work on improving the presentation of financial information in the direction of increasing its transparency and facilitating comparability of financial results of similar enterprises and replacing IAS with IFRS. For this purpose, a new IFRS 18 “Presentation and Disclosure in Financial Statements” was issued, which replaces IAS 1 “Presentation of Financial Statements” and makes significant changes to the structure of the Income Statement.

The purpose of the study. Identify discrepancies between the Income Statement in accordance with the requirements of IFRS 18 and the Statement of financial results in accordance with NP(S)BO 1 and propose ways to eliminate them.

Research methods. The research used the method of comparison and analogy to identify changes in the Income Statement in connection with the release of IFRS 18 and to make a proposal for improving the regulatory acts of Ukraine.

Results. As a result of the study, it was found that according to the requirements of IFRS 18, income and expenses in the Income Statement are classified according to five categories, three of which are new: operating, investment and financial. This will enable the calculation of several intermediate totals: Operating Profit or Loss and Profit or Loss before the results of financial activities and income taxes. In addition, inconsistencies were found between IFRS and NP(S)BO in matters of classification of income and expenses caused by operations with non-current assets, in particular, fixed assets and intangible assets. These differences lead to the display of these revenues and expenses in different parts (sections) of the statement of financial results (Income Statement), which leads to differences in the amount of operating profit in different systems of standards.

Prospects. In further research, it is advisable to develop the classification of income and expenses, based on the division of non-current assets into “operating” and “non-operating” depending on their role in the business model of the business entity; substantiate the separation of income and expenses to determine the net profit for operating, investment and financial activities. Such separation will lead to a new format of the financial results report, in which it will be possible to determine the profit (loss) before the results of financial activities and income taxes and other indicators for evaluating the efficiency of the enterprise.