ALRAQABA . ISSUE 20 21 In response to the needs of investors and financial statement users, the income statement will be presented differently under IFRS 18 to provide more transparent and quality information. New mandatory subtotals shall be presented on the face of the income statement, i.e., 1. Operating profit. 2. Profit before financing and income tax. Under IFRS 18, the income statement will be structured as follows: Cost of goods sold Other operating income Gross profit Selling expenses Research and development expenses General and administrative expenses Other operating expenses Operating profit Share of profit from associates and joint ventures Other investment income Profit before financing and income tax Interest expense on borrowings and lease liabilities Interest expense on pension liabilities Profit before tax Income tax expense Profit for the year Operating Category Investing Category Financing Category • The above line items clarify what is classified in each of the three categories and do not necessarily indicate the line items that an entity would present in its statements. An entity would present line items that help provide a useful, structured summary of its income and expenses. Financial Standards Audit &
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