Interpreting non-operating items on IFRS-based income statements
The 2007 income statement for Group Danone, a French-based food processor that publishes IFRS-based financial statements, is provided below (in million euros).
|
2007 |
|
|
Net sales |
12,776 |
|
Operating expenses |
(11,230) |
|
Operating income |
1,546 |
|
Net cost of debt |
(177) |
|
Income before taxes |
1,369 |
|
Income tax |
(410) |
|
Income from consolidated companies |
959 |
|
Net income of equity-accounted affiliates |
87 |
|
Net income from continuing operations |
1,046 |
|
Net income from discontinued operations |
3,292 |
|
Net income |
4,338 |
a. Briefly explain each of the line items on the income statement.
b. Explain what must have happened at Danone in 2007 that boosted net income by so much, and comment on possible implications for Danone”s future.