It shows the profitability of core operations before financing and tax effects. TFRS 18 (IFRS 18), effective from 2027, makes the operating profit subtotal mandatory and defined.
Source: TMS 1, TFRS 18
Related terms
Gross profitProfit calculated by deducting cost of sales from revenue.EBITDAEarnings before interest, tax, depreciation and amortisation; used as an indicator of the cash-like profitability generated by a company's core operations.Statement of profit or lossThe statement showing an entity's revenue and expenses for a period and the resulting profit or loss.Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: October 31, 2026 · This definition is for general information only.