IASB Plans Overhaul of Financial Definitions

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Nov 02, 2016

On November 2, 2016, the International Accounting Standards Board (IASB) announced it would look at providing new definitions of common financial terms such as earnings before interest and taxes, or ebit.

The new definitions will be introduced over the next five years, in order to provide sufficient time for suggestions and comment from market participants. The changes will not result in new standards, but will require the board to overhaul existing ones.

Firms that decide against adopting the new IASB definition for ebit, for example, could be required to reconcile their own ebit calculation into one based on the IASB’s definition.

Review a summary on the Wall Street Journal's website and the IASB's five-year work plan on the IASB's website.

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