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AASB 7 - Financial Instruments: Disclosure
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Summary 
Developments, Key Differences & History 
Compared to IFRS 
Interpretations 
Rejection Notices 
Questions & Answers 
Articles 
AASB website 

 
IFRIC Rejections and Guidance - 
  1. November 2006 - Presentation of ‘net finance costs’ on the face of the income statement
 
1. November 2006 - Presentation of ‘net finance costs’ on the face of the income statement 
 
Issue:  
 
At its meeting in October 2004, the IFRIC noted that, taken together, paragraphs 32 and 81 of IAS 1 Presentation of Financial Statements preclude the presentation of ‘net finance costs’ on the face of the income statement unless finance costs and finance revenue are also shown on the face of that statement. IFRS 7 Financial Instruments: Disclosures was issued in 2005. Paragraph IG13 of IFRS 7 states that ‘The total interest income and total interest expense disclosed in accordance with paragraph 20(b) is a component of the finance costs, which paragraph 81(b) of IAS 1 requires to be presented separately on the face of the income statement. The line item for finance costs may also include amounts that arise on non-financial assets or non-financial liabilities.’ 
 
The IFRIC was asked whether the IFRIC’s October 2004 analysis regarding presenting ‘net finance costs’ on the face of the income statement is still valid in the light of 
paragraph IG13 of IFRS 7. 
 
IFRIC Decision:  
 
The IFRIC believed that its analysis in October 2004 was still valid. Consequently, [the IFRIC decided] not to take the issue onto the agenda.  
 
The IFRIC believed that the words in paragraph IG13 of IFRS 7 may result in confusion. [The IFRIC, therefore, decided] to recommend to the IASB that the paragraph should be amended. 
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