Management's New Communication Language in Financial Reports under IFRS 18: Management Defined Performance Measures

Abstract

The aim of the study is to explain the performance criteria defined by the management in the draft text of “Turkish Financial Reporting Standard Presentation and Disclosure in Financial Statements (TFRS 18)”, which was opened to public opinion by the Public Oversight Accounting and Auditing Standards Authority (KGK) on October 21, 2024, and to evaluate the current situation. The criteria that enable the management to share more transparent, explanatory and reliable information with financial statement users are included in this standard for the first time. These criteria are subtotals of income and expenses that are not required to be disclosed in any standard and consist of information disclosed by the management in public communications other than financial statements. In order to compare how information that is currently a performance criterion defined by the management is reported with the requirements of TFRS 18, the 2023 financial report of Teknosa AŞ. was examined using document analysis, one of the qualitative analysis techniques. In the evaluation, it was determined that the disclosures made by the company were inadequate in accordance with the TFRS 18 disclosure requirements, it was not stated which aspect of the company's financial performance was disclosed, and the income and expense items and tax effects included in the disclosure were not disclosed.

Keywords

• IFRS 18
• Management Defined Performance Measure
• New Reporting Language

Finansal Tablolarda Sunum ve Açıklama Standardına İlişkin Taslak Metin’de Yönetimin Yeni İletişim Dili: Yönetim Tarafından Tanımlanmış Performans Ölçütleri

Abstract

Çalışmada, Kamu Gözetimi Muhasebe ve Denetim Standartları Kurumu (KGK) tarafından 21 Ekim 2024 tarihinde kamuoyu görüşüne açılmış olan “Türkiye Finansal Raporlama Standardı Finansal Tablolarda Sunum ve Açıklama (TFRS 18)” taslak metinde yer alan, yönetim tarafından tanımlanmış performans ölçütlerini açıklanması ve mevcut durumun değerlendirilmesi amaçlanmıştır. Yönetimin, finansal tablo kullanıcıları ile daha şeffaf, açıklayıcı ve güvenilir bilgi paylaşmasını sağlayan ölçütler ilk defa bu standartta yer almaktadır. Bu ölçütler, herhangi bir standartta açıklanması zorunlu olmayan gelir ve giderlerin alt toplamları olup, yönetimin finansal tablolar dışında kamuya açık iletişimlerde açıkladıkları bilgilerden oluşmaktadır. Mevcut durumda yönetim tarafından tanımlanan performans ölçütü olma özelliğini taşıyan bir bilginin nasıl raporlandığını, TFRS 18 gereklilikleri ile karşılaştırmak amacıyla nitel analiz tekniklerinden doküman analizi kullanılarak Teknosa AŞ.’nin 2023 yılı finansal raporu incelenmiştir. Yapılan değerlendirmede TFRS 18 açıklama gerekliliklerine göre, şirket tarafından yapılan açıklamalarının yetersiz olduğu, işletme finansal performansının hangi yönü ile ilgili açıklama yapıldığının belirtilmediği, açıklamanın içerdiği gelir ve gider kalemleri ve vergi etkisinin açıklanmadığı tespit edilmiştir.

Keywords

• IFRS 18
• Yönetim Tarafından Tanımlanmış Performans Ölçütü
• Yeni Raporlama Dili

References

1. Aaro Systems AB (2024). Disclosure of management-defined performance measures (MPMs) under IFRS 18, https://aaro.com/wp-content/uploads/2024/08/IFRS-18-Management-defined-Performance-Measures-MPMs-_-August-2024-1.pdf, (Erişim tarihi:26.11.2024).
2. BDO IFR Advisory Limited, (2024). IASB publishes IFRS 18 Presentation and Disclosure in Financial Statements, International Financial Reporting Bulletin, https://www.bdo.global/getmedia/3a3d934d-280d-4477-a281-4a7c9af65dcb/IFRB-2024_04_IFRS-18-Presentation-and-Disclosure-in-Financial-Statements.pdf?ext=.pdf, (Erişim tarihi:25.11.2024).
3. BDO IFR Advisory Limited (2024). IFRS accounting standards in practice IFRS 18 Presentation and Disclosure in Financial Statements (Presentation in the Statement of Profit or Loss), https://www.bdo.global/getmedia/4f832e42-47f0-417d-9fc2-88b69ffd8d70/IFRS-18-Presentation-and-Disclosure-in-Financial, (Erişim tarihi:25. 11.2024).
4. Czajor, Przemysław (2024). “IFRS 18: Advancing the relevance and utility of financial statements for stakeholders”, European Research Studies Journal, 27(2), 265-275.
5. Deloitte (2024). IFRS 18 Presentation and Disclosure in Financial Statements, www.iasplus.com/en/standards/ifrs/ifrs-18, (Erişim tarihi:11.10.2024).
6. EY (2024). IFRS 18 Changes financial performance reporting, https://www.ey.com/en_vn/insights/ifrs/ifrs-18-changes-financial-performance-reporting#:, (Erişim tarihi: 24.11.2024).
7. EY (2024). The IASB issues IFRS 18 presentation and disclosures in financial statements, https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/technical/ifrs-technical-resources/documents/ey-gl-devel-223-iasb-issues-ifrs-18-04-2024.pdf, (Erişim tarihi: 24.11.2024).
8. IASB (2024). Basis for conclusions on presentation and disclosure in financial statements, https://service.betterregulation.com/document/721253, (Erişim tarihi:24.11.2024).

9. IASB (2024). Illustrative examples on presentation and disclosure in financial statements, https://service.betterregulation.com/document/721255, (Erişim tarihi:24.11.2024).
10. IASB (2024). Project Summary IFRS18-Presentation and Disclosure in Financial Statements, https://www.ifrs.org/content/dam/ifrs/project/primary-financial-statements/ifrs-standard/projectsummary-ifrs18-april2024.pdf, (Erişim tarihi: 23.11.2024)
11. KGK (2024). TFRS 18 Finansal Tabloların Sunuluşu ve Açıklamalar Taslak Metin, https://kgk.gov.tr/Portalv2Uploads/files/Duyurular/v2/TFRS/TFRS%2018%20Finansal%20Tablolarda%20Sunum%20ve%20A%C3%A7%C4%B1klama.pdf, (Erişim tarihi: 23.10.2024)
12. KPMG (2024). Presentation and disclosure IFRS 18, https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/ifrg/2024/isg-first-impressions-presentation-and-disclosure-ifrs-18.pdf, (Erişim tarihi:30.10.2024).
13. Malinovskaya, Natal’ya (2024). Presentation and disclosure in financial statements: New developments in IFRS 18, International Accounting, 27(8), 848-860. https://doi.org/10.24891/ia.27.8.848
14. Neves, Henrique de Castro (2024). “IFRS 18 implementation in Brazilian enterprises: Challenges and opportunities”, International Journal of Business Administration, 15(2), 102-112. https://doi.org/10.5430/ijba.v15n2p102
15. Öztürk, Erkan-Güleç, Ömer Faruk- Gökçen, Gürbüz (2024). IFRS 18 Finansal Tabloların Sunuluşu ve Açıklamalar: Finansal performans ölçümünde yeni bir yaklaşım, e-proceedings of MODAV-ICA 2024, Proactive Accounting & Continuous Auditing, Eylül 12-15, 2024, Çanakkale, 78-82.
16. PWC (2024). IFRS 18 is here: Redefining financial performance reporting, https://viewpoint.pwc.com/dt/gx/en/pwc/in_briefs/in_briefs_INT/in_briefs_INT/ifrs-18-is-here-redefining-financial-performance-reporting.html, (Erişim tarihi: 24.11.2024).
17. Salotti, Bruno Meirelles (2024). “IFRS 18 – The forthcoming standard for presentation in financial statements: Main changes, practical implications, and research opportunities”, Journal of Education and Research in Accounting, 18(3), 427-436, https://doi.org/10.17524/repec.v18i3.3583