Rapid Fire
Change in Global Accounting Rule
- 10 Apr 2024
- 1 min read
Recently the International Accounting Standards Board (IASB) published new requirements under which Companies will have to publish standardised operating profit figures from 2027.
- Currently, before arriving at a net profit or loss, many companies report earnings before interest, taxes, depreciation, and amortisation or EBITDA.
- This figure is not defined under IASB rules and therefore can be compiled in different ways to flatter performance.
- International Accounting Standards Board (IASB):
- The IASB, established in 2001 under the oversight of the International Financial Reporting Standard Foundation that develops and approves International Financial Reporting Standards to create a global accounting language for financial reporting, mandated by over 140 jurisdictions.
- Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA):
- EBITDA is a financial metric that evaluates a company's operating performance by excluding the effects of financing and accounting decisions, allowing a focus on core operational profitability.
Read more: Indian Accounting Standards
