KASB modifies IAS 1 requirements in Korean context
22 Oct 2012
The Korea Accounting Standards Board (KASB) has issued amendments to K-IFRS 1001 ‘Presentation of Financial Statements’ to clarify the requirements for disclosure of operating profit or loss. The KASB asserts the amendment "does not contradict IFRS requirements as issued by the IASB because such an addition falls within the scope of permissible modifications to IFRS as issued by the IASB in accordance with the agreement between the IFRS Foundation and the KASB".
Under the amendments to K-IFRS 1001 (equivalent to IAS 1 Presentation of Financial Statements), the following requirements are added:
- Mandatory disclosure of operating profit or loss on the face of the statement of profit or loss and other comprehensive income
- A definition of "operating profit or loss" as an amount of sales minus cost of sales and selling and administrative expenses
- Voluntary disclosure of entity-specific measure of operating performance (under the name of ‘adjusted operating profit or loss’ or, if appropriate, another name), subject to additional requirements and disclosures.
The requirements were developed in response to constituent concern over the fact that IFRS did not require disclosure of operating profit or loss in the financial statements because Korean GAAP had required operating profit or loss to be presented on the face of the financial statements, as well as prescribing the scope of operating profit or loss.
The presentation of alternate profit and other non-GAAP measures remains a contentious issue in many jurisdictions. For instance, regulators in both Australia and New Zealand have recently issued guidance about the acceptable use of these types of measures.
Click for press release (link to KASB website).
