IFRS Groups · Track 1 · Tutorial 2 of 2

Classify profit or loss and cash flow lines

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The IFRS profit or loss shows distribution costs and administrative expenses on their own lines, and the IFRS cash flow statement shows each investing and financing flow. Both read those lines from the accounts you classify.

You will needIFRS switched on and equity classified, as in Switch on IFRS and classify equity. Data administrator access in BrizoConsol.

By the endYour Group’s operating expenses split into distribution, administrative and other, and its investing and financing cash flows on their IFRS lines.

1Know how the lines are filled

Profit or loss	Distribution Costs and Administrative Expenses are the accounts you classify. Other Operating Expenses is everything else in the expense, depreciation and other expense sections, apart from finance costs. Classifying only moves expenses between these three lines: operating profit doesn’t change.
Cash flow	Each investing and financing line is the year’s movement on the accounts you classify. The operating section is worked out from profit, depreciation and working capital, and needs no classification apart from Gain/Loss on Disposal.
What isn’t classified	The statement still ends at the bank balance. A movement that isn’t on any line shows in Effect of Exchange Rate Changes on Cash, which is the difference between the cash movement and the three sections.

Your Group’s IFRS profit or loss for 2026: before classifying, all 1,240,000 of operating expenses are Other Operating Expenses; after, 310,000 are Distribution Costs, 520,000 Administrative Expenses and 410,000 Other Operating Expenses, with Operating Profit 1,304,000 both times — The same operating expenses, regrouped.

2Classify the profit or loss lines

Select Your Group, and open Settings → Organisation Settings → Accounting Standard.
Under Account Classifications, choose P&L in the Type column.
On Distribution Costs, click Select accounts. In Select P&L Accounts, tick 6100 Selling & Marketing and 6150 Delivery Costs, and click Apply.
On Administrative Expenses, select 6300 Office Rent, 6400 Admin Salaries and 6500 Professional Fees.

Which accounts	Expense accounts only. Other Operating Expenses is the expense, depreciation and other expense sections, less finance costs and these two lines, so a cost-of-sales account classified here would also stay in Cost of Revenue and show twice.
Share of Profit of Associates	The account your share of an associate’s profit is posted to, from the Other Income section. Your Group has no associate yet; this line is set in Account for associates and joint ventures.

3Classify the cash flow lines

Choose CF in the Type column. The lines are grouped into Operating, Investing and Financing activities.
On each line your group uses, click Select accounts, tick the account in Select Cash Flow Accounts, and click Apply.
Click Save Changes.

The CF tab for IFRS, grouped into operating, investing and financing activities: the gain on disposal, plant and equipment, bank loan, lease liabilities and interest expense accounts each on their line, and lines the group doesn’t use left empty — The operating line (1) and the financing lines (2); lines the group doesn’t use stay empty.

Choose the account whose movement over the year is that cash flow:

Line	Your Group’s account
Gain/Loss on Disposal	4900 Gain on Disposal of Assets. The gain is taken out of operating cash flow because it isn’t cash.
Purchase of PPE	1600 Plant & Equipment, the cost account. Its increase is the year’s purchases when nothing was sold.
Proceeds from Borrowings	2600 Bank Loan.
Payment of Lease Liabilities	2700 Lease Liabilities.
Interest Paid	7100 Interest Expense. IFRS allows interest paid in operating or financing activities; the IFRS statement shows it under financing, and adds finance costs back in the operating section.

A cash flow line is a second classification: an account can be on one Equity or P&L line and also on one CF line. So an equity account keeps its equity line and can be given the financing line its movement belongs to — for a share issue, 3000 Share Capital on Proceeds from Issue of Share Capital. Putting an account on two CF lines, or on two Equity or P&L lines, gives The same account cannot be used for multiple classifications within the same standard. when you save.

4Check the statements

Open Reports → All Reports → Consolidated Statement of Profit or Loss for 2026.
Open Consolidated Statement of Cash Flows for 2026, and look at the bottom of it.

The bottom of Your Group’s IFRS cash flow statement for 2026: before classifying, Effect of Exchange Rate Changes on Cash is -618,400 because unclassified movements land there; after, it is -3,250, with cash at the end of the period 1,402,350 both times — Unclassified movements show as an exchange effect until they are on their lines.

Check

On the profit or loss, Distribution Costs is 310,000, Administrative Expenses 520,000 and Operating Profit still 1,304,000. On the cash flow, Effect of Exchange Rate Changes on Cash is down to -3,250, a size that fits Company B’s and Company C’s cash being translated, and Cash and Cash Equivalents at End of Period is 1,402,350, the bank balance.

5If something goes wrong

Effect of Exchange Rate Changes on Cash is still large	A movement isn’t on any line — often a new loan, or an asset bought into an account that isn’t classified. Find the account that moved and put it on its line.
Other Operating Expenses is negative	A line has an account that isn’t an expense. Move it off Distribution Costs or Administrative Expenses.
The same account cannot be used for multiple classifications within the same standard.	One account is on two CF lines, or on two Equity or P&L lines. Keep it on one of each.
[Account] is an equity account, so it cannot be assigned to a P&L classification.	The account was changed to an equity account while this page was open. Reload the page: the account is no longer on the P&L line, and the save goes through.

Want more detail? See the documentation

Accounting Standards Customise Cash Flow

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