Other Comprehensive Income Vs Profit And Loss

This article looks at what differentiates profit or loss from other comprehensive income and where items should be presented.

Other comprehensive income vs profit and loss. The company needs to show clearly why its net assets go up or down is it due to capital change. To avoid confusion when discussing comprehensive income statements. Profit or loss for the period. The reason for introducing other comprehensive income and merging it with profit or loss into the statement of comprehensive income was to distinguish between capital and performance changes.

Other comprehensive income vs. This statement includes regular line items which in the language of iass are known as profit and loss items. You may not have to file a profit and loss statement for your business with any regulatory agency but there are very good reasons for a self employed individual to keep one. The statement of profit or loss includes all realised gains and losses e g.

Ias 1 presentation of financial statements defines profit or loss as the total of income less expenses excluding the components of other comprehensive income. For and against the purpose of the statement of profit or loss and other comprehensive income oci is to show an entity s financial performance in a way that is useful to a wide range of users so that they may attempt to assess the future net cash inflows of an entity. Net profit for the year the statement of comprehensive income would include both the realised and unrealised gains and losses e g. The key to understand the difference between profit or loss other comprehensive income and changes in equity is to understand where these changes are coming from.

Other comprehensive income. With components of profit and loss recognized. Statement of other comprehensive income. Revaluation of certain assets directly through equity and not through profit or loss.

One single statement statement of comprehensive income for the year ended 31 march 20x8. Other comprehensive income oci is defined as comprising items of income and expense including reclassification adjustments that are not recognised in profit or loss as required or permitted by other international financial reporting standards ifrs.