Operating profit

Learning objectives

• Identify the content of operating profit or loss.L1
• Calculate operating profit or loss from the classified items.L1, L2

Normative references

• IFRS 18 §69The statement of profit or loss presents operating profit or loss (total of the operating category, para. 70), profit or loss before financing and income taxes (operating profit or loss plus the investing category, para. 71) and profit or loss (total of all categories, para. 72); the second subtotal is not presented by an entity that, providing financing to customers as a main business activity, classifies in operating the income and expenses from liabilities unrelated to that activity (paras. 73 and 74).

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

3 questions

• Operating profit includes the share of the result of equity-accounted joint ventures.L1
• Sapin SA classifies the following items for the year in the operating category: sales revenue {revenue}; cost of sales {cost_of_sales}; selling and administrative expenses {selling_and_admin}; research and development {research_and_development}; other operating income {other_operating_income}. It classifies outside that category the interest on a loan, {loan_interest}, in financing, and the share of profit of an associate, {associate_share_of_profit}, in investing (classification provided by the case). Calculate operating profit.L2
• A management controller describes operating profit of Tilleul SA under IFRS 18. Which of the controller's sentences is wrong?L2