Local GAAP Groups · Track 1 · Tutorial 2 of 2

Classify profit and loss and cash flow lines

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The Local GAAP profit and loss reads almost every line from the accounts’ types, so there is little to classify there. The Local GAAP cash flow statement shows each investing and financing flow, and reads those lines from the accounts you classify.

You will needLocal GAAP switched on and equity classified, as in Switch on Local GAAP and classify equity. Data administrator access in BrizoConsol.

By the endYour Group’s profit and loss lines checked against the account types, and its investing and financing cash flows on their Local GAAP lines.

1Know how the lines are filled

Profit and loss	Every line except one comes from the type of each account in the Common COA — Revenue, Direct Costs, Expense, Depreciation and so on. The exception is Share of Profit of Associates, the only P&L classification Local GAAP has.
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 FX on Cash, which is the difference between the change in cash and the three sections.

One line is classified (1); the rest follow the account types.

2Check the profit and loss lines

Because the lines follow the account types, an account on the wrong line is fixed by changing its type in the Common COA, not on the Accounting Standard page.

Line	Accounts of type
Revenue	Revenue.
Cost of Sales	Direct Costs.
Other Income	Other Income and Interest Income, less Finance Income and the share of profit of associates, which have lines of their own. Interest income is part of operating profit here.
Operating Expenses	Expense, Depreciation and Other Expense. Finance costs are typed Other Expense too, but they stay on Finance Costs.
Finance Income	Finance Income.
Finance Costs	Finance Costs and Interest Expense.
Tax	Taxes Expense.

On the Accounting Standard page, the P&L tab has one line, Share of Profit of Associates: the account your share of an associate’s profit is posted to. Your Group has no associate yet; this line is set in Account for associates and joint ventures. Its warning sign stays until then.

3Classify the cash flow lines

Select Your Group, and open Settings → Organisation Settings → Accounting Standard.
Under Account Classifications, choose CF in the Type column. The lines are grouped into Operating, Investing and Financing activities, each with how many of its lines have an account.
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 Local GAAP, 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), the investing lines (2) and the financing lines (3); 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.
Purchase of Intangible Assets, Proceeds from Sale of Intangible Assets	The intangible asset cost account, and the account the proceeds of a sale are recorded in. Your Group has none, so these stay empty.
Proceeds from Borrowings	2600 Bank Loan.
Payment of Lease Liabilities	2700 Lease Liabilities.
Interest Paid	7100 Interest Expense. The Local GAAP statement adds finance costs back in the operating section and shows the interest paid under financing.
Dividends Paid, Dividends Paid to NCI	The accounts dividends to the owners, and to non-controlling interests, are booked to. These two lines also feed the Dividends rows of the statement of changes in equity.

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, and the group’s Profit & Loss for the same year.
Open Consolidated Statement of Cash Flows for 2026, and look at the bottom of it.

The bottom of Your Group’s Local GAAP cash flow statement for 2026: before classifying, Effect of FX 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

Profit After Tax on the Local GAAP profit and loss equals Net Profit on Profit & Loss. On the cash flow, Effect of FX on Cash is down to -3,250, a size that fits Company B’s and Company C’s cash being translated, and Cash at End of Period is 1,402,350, the bank balance.

5If something goes wrong

Effect of FX 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.
An account is on the wrong profit and loss line	Its type in the Common COA is wrong. Change the type; the line follows it.
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 Common Chart of Accounts Customise Cash Flow

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