Categories and subtotals in profit or loss

In its redeliberations, the IASB recognised a need to provide clarifications on the classification of income and expenses in specific situations.

Keywords: Mazars, Thailand, IASB, income, expense

3 August 2023

It therefore reached the following tentative decisions:

Income and expenses arising from the derecognition of an asset or liability shall be classified in the same category as the income and expenses generated by that asset or liability immediately before derecognition.
Income and expenses arising from a transaction or other event that changed the category in which these income and expenses were classified (without derecognising the asset or liability) shall be classified in the category in which the income and expenses were classified immediately before the transaction or event occurs. The staff papers on the topic give the example of transfers into or out of investment property.
If the income and expenses (as described in 1) and 2) above) arise from a single transaction or event involving a group of assets and liabilities that generated income and expenses classified in different categories of profit or loss (such as loss of control of a subsidiary, which becomes an associate), the gain or loss arising from the transaction or event would be classified in:

the operating category, if any of the assets in the group of assets and liabilities generated income and expenses that were classified in the operating category immediately before the event or transaction;
the investing category, if all the assets in the group of assets and liabilities generated income and expenses that were classified in the investing category.