Document ID: chunk:federal_register_of_legislation:F2024L00708:body:0:p3
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and why they are used; and
(c)                    investors would like to see information more appropriately grouped (aggregated or disaggregated) in the financial statements.

AASB 18 Presentation and Disclosure in Financial Statements is the Australian equivalent of IFRS 18.

Main requirements
The key presentation and disclosure requirements established by AASB 18 are:
(a)                    the presentation of newly defined subtotals in the statement of profit or loss. AASB 18 requires an entity to:
          (i)                     classify income and expenses into operating, investing and financing categories in the statement of profit or loss – plus income taxes and discontinued operations; and
          (ii)                   present two newly defined subtotals – operating profit and profit before financing and income taxes;
(b)                   the disclosure of management-defined performance measures. Management-defined performance measures are alternative or non-GAAP performance measures (that is, measures that are not defined by Australian Accounting Standards) that are subtotals of income and expenses used in public communications. AASB 18 requires disclosure of reconciliation between those measures and the subtotals required by AASB Standards; and
(c)                    enhanced requirements for grouping (aggregation and disaggregation) of information. AASB 18 provides guidance for entities on grouping transactions and other events into the line items in the primary financial statements and information disclosed in the notes. These principles generally require entities to:
          (i)                     aggregate items that share characteristics and disaggregate items that have different characteristics;
          (ii)                   group items in a way that does not obscure material information or reduce the understandability of the information presented; and
          (iii)                 place items in the primary financial statements and the notes to fulfil their complementary roles.

In combination, these three key sets of requirements strike a balance by introducing defined subtotals that create a consistent structure in the statement of profit or loss to provide a starting point for analysis, while leaving room for entities to report their own performance measures. The disclosure requirements for management-defined performance measures anchor entities' own performance measures to the defined subtotals, increasing the transparency of these measures. Additionally, the principles for grouping information will help entities provide more useful information.

AASB 18 replaces AASB 101 Presentation of Financial Statements. As a result, the requirements in AASB 101 have been:

(a)                    replaced by new requirements in AASB 18;
(b)                   transferred to AASB 18 with only limited wording changes; or
(c)                    moved to AASB 108 Basis of Preparation of Financial Statements[1] or AASB 7 Financial Instruments: Disclosures with only limited wording changes.
AASB 18 has also introduced changes to other Australian Accounting Standards, including AASB 107 Statement of Cash Flows, AASB 133 Earnings per Share and AASB 134 Interim Financial Reporting.

Application date
This Standard applies to annual reporting periods beginning on or after 1 January 2027 (see paragraph C1). Earlier