The investing category

Learning objectives

• Distinguish items in the investing category from those in the operating category.L1
• Record the reclassification of an item of income between the investing and operating categories.L1, L2, L3

Normative references

• IFRS 18 §53Except for an entity with a specified main business activity (paras. 55 to 58), the investing category includes income and expenses (returns, effects of initial and subsequent measurement including on derecognition, incremental acquisition and disposal costs: para. 54) from investments in associates, joint ventures and unconsolidated subsidiaries, from cash and cash equivalents, and from other assets that generate a return individually and largely independently of the entity's other resources; equity-accounted investments remain in the investing category even when investing in those assets is a main business activity (para. 55(a)).

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• In which IFRS 18 category are the income and expenses of equity-accounted entities classified?L1
• Tiare SA, an industrial entity with no specified main business activity (case convention), places its cash and cash equivalents in interest-bearing accounts and receives EUR 24,000 of interest. In which category is this interest classified?L2
• Atlas SA, an industrial entity with no specified main business activity, had classified in the investing category income of {income_reclassified} from the sale of by-products of its own manufacturing. The year-end review concludes that this income arises from its operating activities and belongs in the operating category (case facts). Record the presentation entry that reclassifies this income.L2