Primary financial statements

On the Primary Financial Statements project, the Board agreed that it would not permit management performance measures (MPMs) to be presented in a columnar format on the face of the Income Statement. The reason for this is that it was felt that presentation of such non-GAAP measures in the Income Statement would give them undue prominence. A lengthy discussion about the merits of Earnings Before Interest and Tax (EBIT) and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) found the Board somewhat divided. It had previously decided that operating profit was effectively the same as EBIT, and that operating profit before depreciation and amortisation should be added to the list of measures that are not considered to be MPMs (meaning that they would not have to meet the disclosure requirements that the Board has developed for MPMs). Furthermore, the Board voted by a majority decision (with two against) that the standard would not include examples of occasions when the labels EBIT or EBITDA could potentially be misleading (which reverses an earlier decision).