For the Statement of Comprehensive Income it composes of 3 parts Including

For the statement of comprehensive income it composes

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***For the ‘Statement of Comprehensive Income’, it composes of 3 parts. Including Revenue, Expense & Other comprehensive income. For Revenue and Expense, it adapts ‘all-inclusive’ approach. The most important thing that is you should know how to classify which account goes to the OTHER COMPREHENSIVE INCOME, and which account goes to the Revenue or Expense. Please be aware of the following accounts, which are the accounts go to the Other Comprehensive Income, and it is also the examine points.
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ACCOUNTS GO TO ‘OTHER COMPREHENSIVE INCOME’: Changes in revaluation surplus. Gains & Losses on REMEASURING available-for-sale financial assets, Income tax to OCI component. Gain or Loss on hedging instruments in a Cash flow hedge. Reclassification adjustments (R eclassification means the amounts that are previously recorded in the OCI, but in the current period we transfer it to the P&L as the items are derecognized) Gains & Losses arising fr om the translation of financial statements of foreign operations Actuarial gains and losses on defined benefit plans FORMAT FOR ‘OTHER COMPREHENSIVE INCOME’
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ABC Pty Ltd Statement of P&L and Other Comprehensive income For the year end of 201X Revenue x x Expense x x Profit before tax for the year Less: Income tax expense (normally given) Net Profit for the year Other Comprehensive Income XX XX XX Total comprehensive Income: (XX) **The format for Statement of financial position ABC Pty Ltd
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Statement of financial position As at 30 June 201X Current Asset X XNote, Inventory Non Current Asset X X Note: Accumulated depreciation. (XX) Total Asset Current Liability X X Non Current Liability X X Total Liability Net Asset Equity Share capital Retained earning Other reserve ( i.e revaluation surplus or general reserve)
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Total Equity ***For Statement of changes equity ABC Ltd Pty Share General Revaluation R/E Total Capital reserve Surplus Balance at 1 July 201X Total Comprehensive income for the year (i.e profit for the yr) Issue of share capital Dividend paid Dividend declared Transfer to general reserve X X Balance at 30 June 201X ( +1 yr) **Some important concept for this topic: Financial statements are compulsory required to present in the annual report: Statement of changes of equity Statement of Financial position
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Statement of other comprehensive income statement of cash flow (THE STATEMENT OF PROFIT & LOSS is excluded). Change in accounting estimates -> prospective application. correcting errors -> retrospective application. [restate the amounts if it is correcting from the last year, but restate the o/b if it is correcting from more than last year, HOWEVER, IF THE CORRECTING ERROR IS IMPRACTICABLE, THEN WE DON’T NEED TO DO SO] Materiality means the omission, misstatement of information that will bring out the adverse affect for the decision making for the stakeholder. Error/omission > 10% , which is stated to be materially Error/omission <5 %, which is stated to be immaterially. If it is in between 5- 10%, then it is the judgement. Disclosure policies in the annual report includes: director declaim complying with ACCT policy, the type of measurement basis, judgement & disclose any change of accounting policy.
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