COMPREHENSIVE INCOME Flashcards
(48 cards)
What is Comprehensive Income?
Comprehensive income is the change in equity during a period resulting from transactions and other events, excluding transactions with owners in their capacity as owners.
What does Comprehensive Income include?
It includes components of profit or loss and other comprehensive income.
What are the Components of Profit or Loss?
Income minus expenses, including tax expense and any income or loss from discontinued operations.
What are the Components of Other Comprehensive Income (OCI)?
OCI includes income and expenses not recognized in profit or loss but recorded as other comprehensive income according to the Philippine Financial Reporting Standards.
What is Other Comprehensive Income (OCI)?
OCI comprises income and expenses, including reclassification adjustments, that are not recognized in profit or loss as required or permitted by Philippine Financial Reporting Standards.
How should Other Comprehensive Income be presented?
The Statement of Comprehensive Income must present line items for OCI during the period, classified by nature.
What are the types of OCI that will be reclassified subsequently to profit or loss?
1) Unrealized gain or loss on debt investment measured at FVOCI.
2) Translation gains and losses of foreign operations.
3) Unrealized gain or loss on derivative contracts designated as cash flow hedge.
What types of OCI will not be reclassified to profit or loss but can be reclassified to Retained Earnings?
DECS:
1) Remeasurement gains and losses for defined benefit plans.
2) Unrealized gain or loss on equity investment measured at FVOCI.
3) Gain or loss on a financial liability designated at FVPL attributed to credit risk.
4) Revaluation surplus.
How are Revaluation Surplus and Remeasurement Gains Treated in OCI?
Revaluation surplus and remeasurement gains for defined benefit plans are excluded from profit or loss and may be transferred to Retained Earnings.
How many options does an entity have for presenting comprehensive income?
An entity has two options for presenting comprehensive income: 1) Two Statements and 2) Single Statement of Comprehensive Income.
What is the Two-Statement format of presenting comprehensive income?
One statement is an income statement showing the components of profit or loss, and the second is a statement that begins with profit or loss plus or minus components of other comprehensive income.
What does a Single Statement of Comprehensive Income show?
It combines the components of profit or loss and other comprehensive income in a single statement.
What information should be presented in the Statement of Comprehensive Income?
Revenue, finance costs, share of profit or loss of associates, tax expense, total of post-tax profit or loss of discontinued operations, and total comprehensive income.
What are allocations of Profit or Loss for the Period?
These disclose the portion of profit or loss attributable to minority interest and owners of the parent.
What forms can the Income Statement take?
The Income Statement can either classify expenses based on their nature or by their function.
What is the Nature of Expense Method?
It aggregates expenses by nature without reallocating them among various functions like cost of sales, distribution, or administrative expenses.
What is the Function of Expense or Cost of Sales Method?
It classifies expenses based on their function, such as cost of sales, distribution costs, and administrative expenses.
What additional details should be disclosed for the function-based classification?
Expenses such as depreciation, amortization, and employee benefit costs should be disclosed separately.
Can extraordinary items be presented in the Income Statement?
No, extraordinary items cannot be presented either on the face of the Income Statement or in the notes.
What might General and Administrative Expenses (GenAd) include?
Rent, legal and audit fees, officers’ salaries, and insurance.
What might Selling Expenses include?
Rent, freight-out, sales salaries, and commissions.
What are not part of Net Income, even though they involve financial changes?
Dividend received from associates, gain on sale of equity investments at FVOCI, and credit adjustment of prior-year profit for over-depreciation (net of tax).
What is the general treatment of equity earnings of an associate in Net Income?
Equity earnings of an associate, such as a 25% interest, are considered part of Net Income as investment income.
How are unrealized gains on equity investments held for trading treated?
These unrealized gains are recognized in Net Income because trading securities are measured at fair value through profit and loss.
