Statement of Comprehensive Income (PAS 1)

Presentation: - presenting only an income statement is prohibited

1. Single statement presentation
2. Two-statement presentation

 Profit or Loss
- Excess of income over expense; while the deficiency is loss excluding OCI
- Line items:
 Revenue
 Finance cost
 Gains/losses from derecognition of FA
 Impairment gains/losses
 Gains/losses on reclassification of FA@FV-OCI to FV-PL
 Share in P/L of associates and joint ventures
 Tax expense
 Result of discontinued operations
- Extraordinary items are prohibited

 Presentation of Expenses
- Nature of expense method

Revenue xx
Other income xx
Changes in inventories of finished x
goods and work in progress x
Raw materials and consumables x
used x
x
Employee benefits expense x
Depreciation and amortization x
expense x
x
Other expenses x
(xx
Total expenses )
Profit before tax xx
(xx
Income tax expense )
Profit after tax xx

- Function of expense method (Cost of Sales method)

Revenue xx
(xx
Cost of sales )
Gross profit xx
Other income xx
(xx
Distribution cost (selling expense) )
Administrative expenses (gen & admin (xx
expense) )
(xx
Finance cost (interest expense) )
(xx
Other expenses (losses) )
Profit before tax xx
(xx
Income tax expense )
Profit after tax xx

 Other Comprehensive Income

- Components:
 Changes in revaluation surplus
 Remeasurements of the net defined benefit liability
 Gains/losses on investments-FVOCI
 Gains/losses-FS translation
 Gains/losses-Hedging: cash flow hedge (effective portion)
  Changes fair value of a financial liability-FVPL (credit risk)
 Changes in time value of option-hedging instrument
 Changes in the value of forward elements

 Reclassification Adjustments (PAS1.7)

- From OCI to profit or loss in the current period
- Gross of tax
- Gain: deduction in OCI; addition to P/L
- Loss: addition to OCI; deduction from P/L
- Do not arise on change in:
 Revaluation surplus
 Derecognition of equity instrument-FVOCI
 Remeasurement of the net defined benefit liability

 Presentation of OCI

Reclassificatio
Types of OCI n adjustment?
a. Changes in revaluation surplus No
b. Remeasurements of the net defined
benefit liability (asset) No
c. FV changes in FVOCI
equity instrument (election) No
debt instrument (mandatory) Yes
d. Translation differences on foreign
operations Yes
e. Effective portion of cash flow hedges Yes

 Total Comprehensive Income

- Sum of P/L and OCI
- Non-owner changes in equity
- Helps users better assess the overall financial performance of the entity

Accounts Receivable

A/R, beg. xx
Sales on account xx xx Collections on accounts
A/R, end xx

Accounts Payable
Purchase discounts xx xx A/P, beg.

Disbursement for purchases xx xx Gross purchases

  xx A/P, end

Inventory
Inventory, beg. xx
Gross purchases xx xx Purchase discounts
Freight in xx xx Cost of sales
Inventory, end xx

Net credit sales

Accountsreceivable turnover=
( AR , beg+ AR , end )
2
 Cost of Sales
Inventory turnover =
( Inv , beg+ Inv , end )
2

Raw Materials
Inventory
RMI, beg. xx
RMI used in
Purchases xx xx production
RMI, end. xx

Work in Process Inventory

WIP, beg. xx
RMI used in production xx
Direct labor xx
Cost of goods
Production overhead* xx xx manufactured
WIP, end. xx

Total goods put into process = cost of goods manufactured + WIP, end.

*Prime cost = Direct materials + Direct labor

Production overhead = % * Prime cost

Finished Goods Inventory

FG, beg. xx
Cost of goods
Cost of goods manufactured xx xx sold
FG, end. xx

Total goods available for sale = cost of goods sold + FG, end.