Statement of comprehensive income

Comprehensive income for a period includes profit or loss for that period plus other comprehensive income recognized in that period. As a result of the revision to IAS 3, the standard is now using profit or loss rather than net profit or loss as the descriptive term for the bottom line of the income statement.

All items of income and expense recognized in a period must be included in profit or loss unless a standard or an interpretation requires otherwise. Some IFRSs require or permit that some components to be excluded from profit or loss and instead to be included in other comprehensive income.

The components of other comprehensive income include:

• Changes in revaluation surplus (IAS 16 & IAS 38)
• Actuarial gains and losses on defined benefit plans recognized in accordance with IAS 19
• Gains and losses arising from translating the financial statements of a foreign operation (IAS 21)
• Gains and losses on remeasuring available-for-sale financial assets (IAS 39)
• The effective portion of gains and losses on hedging instruments in a cash flow hedge (IAS 39)

An entity has a choice of presenting:

• A single statement of comprehensive income or
• Two statements:
• An income statements displaying components of profit or loss and
• A statement of comprehensive income that begins with profit or loss (bottom line of the income statement) and displays components of other comprehensive income

Minimum items of the face of the statement of comprehensive income should include:

• Revenue
• Finance costs
• Share of the profit or loss of associates and joint ventures accounted for using the equity method
• Tax expense
• A single amount comprising the total of
1. The post-tax profit or loss of discontinued operations
2. The post-tax gain or loss recognized on the disposal of the assets or disposal group(s) constituting the discontinued operation
• Profit or loss
• Each component of other comprehensive income classified by nature
• Share of the other comprehensive income of associates and joint ventures accounted for using the equity method
• Total comprehensive income

The following items must also be disclosed in the statement of comprehensive income all allocations for the period:

• Profit or loss for the period attributable to non-controlling interests and owners of the parent
• Total comprehensive income attributable to non-controlling interests and owners of the parent

Additional line items may be needed to fairly present the entity's results of operations.

No items may be presented in the statement of comprehensive income (or in the income statement, if separately presented) or in the notes as extraordinary items.

Certain items must be disclosed separately either in the statement of comprehensive income or in the notes, if material, including:

• Write-downs of inventories to net realizable value or of property, plant and equipment to recoverable amount, as well as reversals of such write-downs
• Restructurings of the activities of an entity and reversals of any provisions for the costs of restructuRing
• Disposals of items of property, plant and equipment
• Disposals of investments
• Discontinuing operations
• Litigation settlements
• Other reversals of provisions

Expenses recognized in profit or loss should be analyzed either by nature (raw materials, staffing costs, depreciation, etc) or by function (cost of sales, selling, administrative, etc). If an entity categorises by function, then additional information on the nature of expenses - at a minimum depreciation, amortisation and employee benefits expense - must be disclosed.