Thursday, August 12, 2010

Changes to the Presentation of Other Comprehensive Income

At present, entities have an option in IAS 1 Presentation of Financial Statements to present either a statement of comprehensive income or two separate statements of profit or loss and other comprehensive income.

As prescribes in para. 81 of IAS 1 : an entity shall present all items of income and expense recognised in a period : (a) in a single statement of comprehensive income, or (b) in two statements : a statement displaying components of profit or loss (separate income statement) and a second statement beginning with profit or loss and displaying components of other comprehensive income (statement of comprehensive income).

On 27 May 2010, the International Accounting Standards Board (IASB) published for public comment proposals to improve the consistency of how items of Other Comprehensive Income (OCI) are presented.

This exposure draft proposes to require a statement of profit or loss and OCI containing two distinct sections - profit or loss and other comprehensive income.

It also proposes a new presentation approach for items of OCI. With recent decisions in other projects, more items will be presented in OCI. IFRS 9 and the proposed amendments to IAS 19 have introduced new items that will be presented in OCI.

The IASB is proposing to require that items that will never be recognised in profit or loss should be presented separately from those that are subject to subsequent reclassification (recycling).

The Board invites comments on the proposals in this ED, particularly on the questions set out in the ED. For instance, in Question 1 : the board proposes to change the title of the statement of comprehensive income to 'statement of profit or loss and other comprehensive income' when referred to in IFRSs and its other publications. Do you agree ? Why or why not ? What alternative do you propose ?

The exposure draft is open for comment until 30 September 2010.

Link to the IASB publications :

  1. Presentation of Items of Other Comprehensive Income
  2. IASB proposes improvements to the presentation of items of Other Comprehensive Income

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