September 2025
In this video, Brian O’Donovan, KPMG’s Global IFRS and Corporate Reporting Leader and a member of the IFRS Interpretations Committee (IFRIC), discusses a recent Committee topic that has generated significant attention: the presentation of foreign exchange differences on intragroup loans under IFRS 18 Presentation and Disclosure in Financial Statements.
The issue may appear technical, but it carries real implications for how multinational groups communicate financial performance. Intragroup loans are common within global organizations, often denominated in different currencies. As exchange rates fluctuate, these differences can materially affect reported results—raising the question of how they should be classified in the statement of profit or loss.
Brian outlines the Committee’s debate between two perspectives: whether all such exchange differences should be presented as operating by default, or whether their classification should reflect the nature of the underlying transaction, potentially as investing or financing. While the Committee did not reach a definitive conclusion, the discussion underscores the judgment involved in applying IFRS 18 consistently.
This agenda decision highlights the evolving landscape of financial reporting and encourages preparers to consider how classification choices can shape the story their consolidated financial statements tell.
