This is the combined statement showing the
COMPREHENSIVE INCOME
The change in equity during a period resulting from
transactions and other events, other than changes resulting from
transactions with owners in their capacity as owners.
Includes:
A. components of profit or loss
Profit or loss
The total income less expenses, excluding the
components of other comprehensive income.
B. components of other comprehensive income
OTHER COMMPREHENSIVE INCOME
Comprises items of income and expenses including
reclassification adjustments that are not recognized in profit or
loss as required or permitted by PFRS.
Components:
A. OCI that will be reclassified subsequently to profit or loss when
specific conditions are met.
1. Unrealized gain or loss on equity investment
measured at fair value through other comprehensive
income.
2. unrealized gain or loss on debt investment measured
at fair value through other comprehensive income.
3. Gain or loss from translation of the financial
statements of a foreign operation.
B. OCI that will not be reclassified subsequently to profit or loss
4. revaluation surplus during the year.
5. Unrealized gain or loss from derivative contracts
designated as cash flow hedge.
6. “remeasurements” of defined benefit plan, including
actuarial gain or loss.
7. Change in fair value attributable to credit risk of a
financial liability designated at fair value through profit
or loss.
Presentation of other comprehensive income
PAS 1 paragraph 82A, provides that the statement of
comprehensive income shall present line items for amounts of
other comprehensive income during the period classified by
nature.
The line items for amounts of OCI shall be grouped as follows.
PRESENTATION OF COMPREHENSIVE INCOME
1. TWO STATEMENTS
A. An income statement showing the components of
profit or loss.
B. A statement of comprehensive income beginning
with profit or loss as shown in the income
statement plus or minus the components of other
comprehensive income
2. SINGLE STATEMENT OF COMPREHENSIVE INCOME
components of profit or loss and components of other
comprehensive income in a single statement.
3. Income statement
A formal statement showing the financial performance of an
entity for a given period of time.
SOURCES OF INCOME
A. Sales of merchandise to customers
B. Rendering of services
C. Use of entity resources
D. Disposal of resources other than products
COMPONENTS OF EXPENSE
A. Cogs or cos
B. Distribution costs or selling expenses
C. Administrative expenses
D. Other expenses
E. Income tax expense
DISTRIBUTION COSTS constitute costs which are directly related
to selling, advertising and delivery of goods to customers.
ADMINISTRATIVE EXPENSES constitute cost of administering the
business. These ordinarily include all operating expenses not
related to selling and cost of goods sold.
OTHER EXPENSES are those expenses which are not directly
related to the selling and administrative function.
PAS 1 paragraph 87
An entity shall not present any items of income and
expense as extraordinary items, either on the face of the income
statement or the statement of comprehensive income or in the
notes.
PAS 1 paragraph 82, Income statement and statement of
comprehensive income line items.
A. Revenue
B. Gain and loss from the derecognition of financial asset
measured at amortized cost as required by PFRS 9
C. Finance Cost
D. Share in income or loss of associate and joint ventures
accounted for using equity method
E. Income tax expense
F. A single amount comprising discontinued operations
G. Profit or loss for the Period
H. Total Other Comprehensive income
I. Comprehensive incoe for the period being the total of profit or
loss and other comprehensive income.
The following items shall be disclosed on the face of the income
statement and statement of comprehensive income:
A. profit or loss for the period attributable to
noncontrolling interest and owners of the parent
B. total comprehensive income for the period
attributable to noncontrolling interest and owners of the parent.
FORMS OF INCOME STATEMENT

PAS 1 paragraph 99. An entity shall present an analysis of

expenses recognized in profit or loss using in classification based
on either the function of expenses or their nature within the
entity, whichever provides information that is more reliable and
more relevant.

2 ways to present an income statement

1. FUNCTIONAL PRESENTATION/COST OF SALES METHOD

This form classifies expenses according to their function
as part of cost of sales , distribution costs, administrative
activities and other activities.

2. NATURAL PRESENTATION/NATURE OF EXPENSE

METHOD
Expenses are aggregated according to their nature and
not allocated among the various functions within the
entity.

PAS 1 paragraph 105

Because each presentation has merit for different types
of entities, management is required to select the presentation
that is reliable and more relevant.

STATEMENT OF RETAINED EARNINGS

Shows the changes affecting directly the retained

earnings of an entity and relates the income statement to the
statement of financial position.

Should be disclosed in the statement of retained earnings:

A. Profit or loss for the period

B. prior period errors
C. dividends declared and paid to shareholders
D. effect of change in accounting policy
E. appropriation of retained earnings

4. Statement of changes in equity

Shows the movements in the elements or components
of the shareholders equity

5. Statement of cash flows

Summarizes the operating, investing and financing
activities of an entity.

6. Notes, comprising a summary of significant accounting

policies and other explanatory notes