Document ID: chunk:federal_register_of_legislation:F2024L00708:body:0:p12
Version: federal_register_of_legislation:F2024L00708
Segment Type: other
Provision Reference: 
Character Range: 31509–34482

or disclosure in the notes is necessary to provide material information.
43 An entity shall label and describe items presented in the primary financial statements (that is, totals, subtotals and line items) or items disclosed in the notes in a way that faithfully represents the characteristics of the item (see paragraphs B24–B26). To faithfully represent an item, an entity shall provide all descriptions and explanations necessary for a user of financial statements to understand the item. In some cases, an entity might need to include in the descriptions and explanations the meaning of the terms the entity uses and information about how it has aggregated or disaggregated assets, liabilities, equity, income, expenses and cash flows.

Offsetting
44 An entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an Australian Accounting Standard (see paragraphs B27–B28).
45 An entity reports separately both assets and liabilities, and income and expenses. Offsetting in the statement(s) of financial performance or the statement of financial position, except when offsetting reflects the substance of the transaction or other event, reduces users' ability to understand the transactions and other events and conditions that have occurred and to assess the entity's future cash flows. Measuring assets net of valuation allowances – for example, obsolescence allowances on inventories and allowances for expected credit losses on financial assets – is not offsetting.

Statement of profit or loss
46 An entity shall include all items of income and expense in a reporting period in the statement of profit or loss unless an Australian Accounting Standard requires or permits otherwise (see paragraphs 88–95 and B86).

Categories in the statement of profit or loss
47 An entity shall classify income and expenses included in the statement of profit or loss in one of five categories (see paragraph B29):
(a) the operating category (see paragraph 52);
(b) the investing category (see paragraphs 53–58);
(c) the financing category (see paragraphs 59–66);
(d) the income taxes category (see paragraph 67); and
(e) the discontinued operations category (see paragraph 68).
48 Paragraphs 52–68 set out requirements for classifying income and expenses in the operating, investing, financing, income taxes and discontinued operations categories. In addition, paragraphs B65–B76 set out requirements on how foreign exchange differences, the gain or loss on the net monetary position, and gains and losses on derivatives and designated hedging instruments are classified in the categories.

Entities with specified main business activities
49 To classify income and expenses in the operating, investing and financing categories, an entity shall assess whether it has a specified main business activity – that is a main business activity of (see paragraphs B30–B41):
(a) investing in particular types of assets, referred to hereafter as