Definition of a management-defined performance measure

Learning objectives

• Identify the three conditions of the definition.L1
• Determine whether a published subtotal is a management-defined performance measure.L1, L2, L3

Normative references

• IFRS 18 §117A management-defined performance measure is a subtotal of income and expenses that the entity uses in public communications outside the financial statements, that communicates management's view of an aspect of the financial performance of the entity as a whole, and that is neither listed in para. 118 nor specifically required by IFRS Accounting Standards; the Standard does not prescribe a calculation method, but a measure calculated other than using the entity's accounting policies is identified and explained (para. B134).

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

2 questions

• Which of the following descriptions corresponds to a management-defined performance measure under IFRS 18?L1
• Sylve SA publishes in its annual press release a "profit before exceptional items", a subtotal of income and expenses that conveys management's view of the performance of the entity as a whole. This subtotal is not required by IFRS 18 nor listed among the specified subtotals (case facts). How should it be characterised?L2