Replaces IAS 1. Changes how you present financial performance, not how you measure it. All income and expenses must now be classified into defined categories.
Income & expense categories
Operating — Core business income and expenses
The default category — anything not classified elsewhere goes here. It reflects your main business activities.
- Revenue from sales of goods or services
- Cost of goods sold and operating expenses
- Salaries, rent, utilities
- Impairment losses on operating assets
Produces the new mandatory subtotal: Operating profit or loss.
Investing — Returns from assets outside core operations
Income and expenses from assets that generate returns independently of main operations.
- Dividends received from equity investments
- Interest earned on loans to third parties
- Gains or losses on disposal of investments
- Share of profit from associates & joint ventures
Assets used daily in operations (e.g. machinery) stay in Operating, not here.
Financing — Cost of raising & Servicing capital
Covers costs from liabilities used to raise finance — the cost of borrowing money.
- Interest expense on bank loans and bonds
- Interest on lease liabilities (IFRS 16)
- Gains or losses on early repayment of debt
- Transaction costs on issuing or repaying loans
Trade payables and operating-related liabilities stay in Operating.
Discontinued operations — Business being wound down or sold
Results from a business segment disposed of or held for sale — keeps ongoing performance separate from one-off exits.
- All income & expenses of the discontinued segment
- Gain or loss on disposal of the segment
- Re-measurement to fair value less costs to sell
Shown as a single line on the income statement; detail disclosed in the notes.
Important note: Comparative 2026 figures must be restated — businesses should begin preparation now.
