From the subtotals to profit for the period

Learning objectives

• Calculate profit or loss before tax and then profit or loss for the period.L2
• Explain where income taxes and discontinued operations fit in the sequence.L2, L3

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

• Cèdre SA reports profit before financing and income taxes of {profit_before_financing_and_tax}. The financing category comprises a net expense of {financing_expense}, the income tax expense is {income_tax_expense} and the discontinued operations category shows a profit of {discontinued_result}. Calculate profit before income taxes, then profit for the year.L2
• In the IFRS 18 statement of profit or loss, profit for the year is obtained after the financing category, income taxes and discontinued operations.L2
• A junior auditor reviews the bridge from profit before financing and income taxes to profit for the year at Aulne SA. Which of the auditor's remarks is wrong?L3