Ind AS 118: presenting expenses by function, and the note that comes with it
Present operating expenses by function and Ind AS 118 asks for the nature amounts in one note. Presenting by nature changes that cost, not the choice.
Topic
Ind AS 118
The new presentation standard: five categories, two mandatory subtotals, and audited management performance measures.
Ind AS 118 is India’s equivalent of IFRS 18. It changes how the statement of profit and loss is presented — not what profit is. Every line of income and expense falls into one of five categories, two subtotals become mandatory, and the “adjusted” measures used with investors — management performance measures — move into the audited notes.
NFRA recommended it to the Central Government in December 2025 for periods beginning on or after 1 April 2027. It becomes law when the MCA notifies it.
The year that matters first is the one before adoption, because it becomes the restated comparative.
One of several topics, each gathering the posts on one change.
8 posts on this
Operating, investing or financing: classifying every line of your P&L
Ind AS 118 sorts every income and expense into five categories. The rule is about the asset or liability underneath, not the expense itself.
Your adjusted EBITDA is about to be audited: management-defined performance measures under Ind AS 118
Under Ind AS 118, adjusted EBITDA moves into the audited notes with a reconciliation and a reason. What that changes for your reporting.
Ind AS 118: what changes in your profit and loss statement, and what doesn't
Ind AS 118 changes no number in your profit. It changes the shape of the statement: five categories, two new subtotals, audited measures.
Ind AS 118 transition: why your FY 2026-27 ledger needs new tags now
Ind AS 118 applies retrospectively, so FY 2026-27 becomes the restated comparative. What your ledger has to carry before that year begins.
Budget versus actuals when the profit and loss layout changes under Ind AS 118
A budget built on statement captions breaks when the captions change. Budget one level below, and any layout is a grouping of the same budget lines.
One definition of EBITDA: making MIS and audited measures agree
Two EBITDA numbers in one company is a definition problem, not a systems problem. How to write one rule, keep the variants named, and hold the bridge.
Ind AS 118 for NBFCs, holding companies and conglomerates: the main-business-activity test
Ind AS 118 classifies interest, dividends and fair value gains by your main business activities. How to make that assessment and write it down.