ALRAQABA . ISSUE 20 23 Requirements for Aggregation and Disaggregation Roles of primary financial statements and notes Aggregation and disaggregation principles Disclosing specific expenses by nature Requirements for line items, including goodwill in the statement of financial position Presenting operating expenses by nature or function (it is permissible to use both options combined) Aggregating line items and using meaningful labels General Requirements Specific Requirements (3) Enhanced requirements for aggregation, disaggregation, and presentation: The IFRS Conceptual Framework for Financial Reporting focuses on terms relating to the aggregation, disaggregation, and presentation of items in financial statements. The term Aggregation refers to the process of combining or adding together elements of a financial statement that share similar characteristics and grouping them in the same category. Classification, on the other hand, is the sorting of assets, liabilities, equity, income, or expenses based on shared characteristics for purposes of presentation and disclosure. The term Presentation refers to the basis, considerations, and general requirements for presenting and reflecting information in financial statements in terms of its format or content. Therefore, IFRS 18 introduces enhanced improvements in the area of aggregation, disaggregation, and presentation of information in financial statements. It also provides specific guidance on whether to include information in the primary financial statements or in the notes. It is worth noting that the statements and the information presented within shall provide a useful structured summary and help realize the following benefits: • Obtaining a clear overview and a better understanding of an entity’s assets, liabilities, equity, income, expenses, and cash flows. • Making comparisons across entities and reporting periods. • Deciding on which items or areas users may wish to seek additional information about in the notes. Financial Standards Audit &
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