Conceptual Framework and Accounting Standards 1

Presentation of Comprehensive Income

1. Two Statements:
a) Income Statement
b) A Statement of Comprehensive income beginning with
profit or loss shown in the income statement plus or minus
components of OCI
2. Single Statement
Combined statement showing the components of profit or
loss and components of OCI in a single presentation
Conceptual Framework and Accounting Standards 1

Statement of Profit or Loss (Income Statement)

it shows the revenues or income and expenses of an entity for a period, and
summarize the performance of the operation whether net income or net loss
Conceptual Framework and Accounting Standards 1

Statement of Comprehensive Income

- it shows the profit or loss section plus other comprehensive income of an entity
Other comprehensive income items are income and expenses that are not
recognized in the income statement as required by the accounting standards

Examples of “other comprehensive income” includes

1. Unrealized gain or lost of debt instrument measured at fair value thru OCI
2. Gain or loss from translating financial statements of foreign operation
3. Revaluation surplus during the year
4. Unrealized gain or lost of equity instrument measured at fair value thru OCI
Conceptual Framework and Accounting Standards 1

Income
Revenues
these are income arising from ordinary operating activities of an entity
- Sales of merchandise to customers
- Rendering of service
Gains - Use of entity resources
these are other income items that may or may not arise from
ordinary operating activities of an entity
- Disposal of resources other than products
Conceptual Framework and Accounting Standards 1

Expense
Cost of Sales
these refers to direct costs attributable for the purchase of goods
that are sold to customers (for merchandising)
or
these refers to costs attributable for the production of goods
that are sold to customers (for manufacturing)

Cost of Service
these refers to direct costs attributable for rendering service to customers