Document ID: chunk:federal_register_of_legislation:F2024L00708:body:0:p63
Version: federal_register_of_legislation:F2024L00708
Segment Type: other
Provision Reference: 
Character Range: 168529–171430

that:
(a) the subtotal does not communicate to users of financial statements management's view of an aspect of the financial performance of the entity as a whole (see paragraphs B125–B128); and
(b) the entity has a reason for using the subtotal in its public communications other than communicating management's view of an aspect of the financial performance of the entity as a whole (see paragraph B129).
B125 Examples of reasonable and supportable information that demonstrate that a subtotal does not communicate to users of financial statements management's view of an aspect of the financial performance of an entity as a whole are:
(a) an entity communicating the subtotal without prominence (see paragraph B126); and
(b) management not using the subtotal internally to assess or monitor the entity's financial performance (see paragraphs B127–B128).
B126 Whether an entity communicates a subtotal without prominence is a matter of judgement based on a number of factors, for example:
(a) the extent of references to the subtotal – few references indicate a lack of prominence, numerous references indicate prominence; and
(b) the content of commentary or analysis about or relying on the subtotal, for example:
(i) a description of the subtotal as information that does not communicate management's view and that is provided only in response to frequent requests from some users of financial statements indicates a lack of prominence;
(ii) use of the subtotal to support management analysis and commentary on the entity's financial performance and to provide explanations of the reasons for changes in the subtotal from period to period indicates prominence; and
(iii) a comparison of the subtotal to competitors' subtotals or industry benchmarks indicates prominence.
B127 Management's use of a subtotal to assess or monitor an aspect of the financial performance of the entity as a whole demonstrates that the subtotal communicates management's view of an aspect of the financial performance of the entity as a whole. However, if management uses a subtotal internally but not in an entity's public communications, the subtotal does not meet the definition of a management-defined performance measure.
B128 An entity might adjust a subtotal communicated in its public communications for use internally by management to assess or monitor the entity's financial performance. In such cases, the entity shall use its judgement to assess whether the subtotal it uses internally is sufficiently similar to the subtotal it uses in its public communications so that paragraph B127 applies. The more similar the subtotals are, the more likely it is that the subtotal used in the entity's public communications communicates to users of financial statements management's view of an aspect of the financial performance of the entity as a whole.
B129 Examples of reasonable and supportable information that