APM Flashcards
What is EBITDA limitations? S18 (1) Q4ii
Depr and amrtz - judgements and estimation - manipulative to profit earnings - to increase profit - excld expenses
Non-recurring items - i.e. insurance recovery, impairment or debt issue costs. BUT, IAS 1 ‘ “e’ shall present addl line items, headings and subtotals in presenting SOPL and OCI when relevant to understanding of users of FS”
> shd NOT use to justofy presentation of underlying, adj and pre-exceptional meas of perf on face of FS (entity specific that can obscure perf)
IFRS 2 - share based payment - equity form of payment - DR SOPL - excl expense inc profit
IAS 37 - restucturing costs are volatile - shd incl in net profit - severance costs and legal cost are [NCI]
IAS 36 - impairments - weaker outlook on e’ acq assets - understandable as non-recurring -mgmt holds accountable - made poor choices on acq assets
comment:
Disguise weak perf bcs net profit in 20X6 is $(5m) loss by adding back expenses.
Sigf decline in profit as 20X5 has made sigf profit.
Lack of authority in certain areas.
Reclassification adjustments S18 Q4b OCI TO SOPL
Reclassf of oci items to sopl in the future period
-to give relevant info to users - eg revl surplus ias 16/ remeas of actuarial gains ias 19
- may not meet/ no longer defn of inc or exp bcs happen in PY - CF
-might not even need to explain headings, total or subtotal in SOPL
