Which of the following is included in comprehensive income?
The IASB has issued a revised IAS 1 'Presentation of Financial Statements'. Show The main changes from the previous version are to require that an entity must:
IAS 1 changes the titles of financial statements as they will be used in IFRSs:
Entities are not required to use the new titles in their financial statements. All existing Standards and Interpretations are being amended to reflect the new terminology. The revised IAS 1 resulted in consequential amendments to 5 IFRSs, 23 IASs, and 10 Interpretations. The revised IAS 1 is effective for annual periods beginning on or after 1 January 2009. Early adoption is permitted. Click for Press Release (PDF 17k). Comprehensive income for a period includes profit or loss for that period plus other comprehensive income recognised in that period. The components of other comprehensive income include:
2023 Curriculum CFA Program Level I Financial Reporting and Analysis IntroductionThe income statement presents information on the financial results of a company’s business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what costs it incurred in connection with generating that revenue. The basic equation underlying the income statement, ignoring gains and losses, is Revenue minus Expenses equals Net income. The income statement is also sometimes referred to as the “statement of operations,” “statement of earnings,” or “profit and loss (P&L) statement.” Under both International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (US GAAP), the income statement may be presented as a separate statement followed by a statement of comprehensive income that begins with the profit or loss from the income statement or as a section of a single statement of comprehensive income. This reading focuses on the income statement, and the term income statement will be used to describe either the separate statement that reports profit or loss used for earnings per share calculations or that section of a statement of comprehensive income that reports the same profit or loss. The reading also includes a discussion of comprehensive income (profit or loss from the income statement plus other comprehensive income). Investment analysts intensely scrutinize companies’ income statements. Equity analysts are interested in them because equity markets often reward relatively high- or low-earnings growth companies with above-average or below-average valuations, respectively, and because inputs into valuation models often include estimates of earnings. Fixed-income analysts examine the components of income statements, past and projected, for information on companies’ abilities to make promised payments on their debt over the course of the business cycle. Corporate financial announcements frequently emphasize information reported in income statements, particularly earnings, more than information reported in the other financial statements. This reading is organized as follows: Section 2 describes the components of the income statement and its format. Section 3 describes basic principles and selected applications related to the recognition of revenue, and Section 4 describes basic principles and selected applications related to the recognition of expenses. Section 5 covers non-recurring items and non-operating items. Section 6 explains the calculation of earnings per share. Section 7 introduces income statement analysis, and Section 8 explains comprehensive income and its reporting. A summary of the key points and practice problems in the CFA Institute multiple choice format complete the reading. Learning OutcomesThe member should be able to:
SummaryThis reading has presented the elements of income statement analysis. The income statement presents information on the financial results of a company’s business activities over a period of time; it communicates how much revenue the company generated during a period and what costs it incurred in connection with generating that revenue. A company’s net income and its components (e.g., gross margin, operating earnings, and pretax earnings) are critical inputs into both the equity and credit analysis processes. Equity analysts are interested in earnings because equity markets often reward relatively high- or low-earnings growth companies with above-average or below-average valuations, respectively. Fixed-income analysts examine the components of income statements, past and projected, for information on companies’ abilities to make promised payments on their debt over the course of the business cycle. Corporate financial announcements frequently emphasize income statements more than the other financial statements. Key points to this reading include the following:
What are the 4 components of other comprehensive income?What Are the Components of Other Comprehensive Income? OCI consists of revenues, expenses, gains, and losses that a firm recognizes but which are excluded from net income.
What is comprehensive income quizlet?What is comprehensive income? Net income plus or minus unrealized gains and losses on securities available for sale, unrealized pension cost, certain unrealized gains and losses on derivatives, and foreign currency translation adjustments.
Which of the following about comprehensive income is correct?Which of the following about comprehensive income is correct? A Profit or loss is equal to comprehensive income plus total other comprehensive income.
Which of the following items is not included in comprehensive income?Therefore, comprehensive income includes all net income plus any and all components of other comprehensive income, the PUFER items. However, comprehensive income would not include investments by stockholders (owners) nor would it include distributions or dividends to stockholders (owners).
|