1 Introduction to published accounts Chapter learning objectives

XYZ Group
Statement of changes in equity for the year ended
31 December 20X8
^Share
capital




Share
premium

Revaluation
surplus

Retained earnings
Total
equity
$ $ $ $ $
Balance at 31
December 20X7 X X X X X
Prior year
adjustment (IAS 8)
(See Chapter 8) (X) (X)
––– ––– ––– ––– ––– Restated balance X X X X X
Dividends (X) (X)
Issue of share
capital X X X
Total
comprehensive
income X X X
Transfer to
retained earnings
(See Chapter 2) (X) X –
––– ––– ––– ––– ––– Balance at 31
December 20X8 X X X X X

KAPLAN PUBLISHING 5

Introduction to published accounts

Statement of profit or loss and other comprehensive income

plus other comprehensive income.
<sup>Total comprehensive income is the realised profit or loss for the period,



Other comprehensive income (OCI) is income and expenses that are not</sup>

recognised in profit or loss (i.e. they are recorded in reserves rather than

as an element of the realised profit for the period). For the purposes of FR, other comprehensive income includes any change in the revaluation of
non-current assets (IAS 16, covered in Chapter 2) and fair value through
other comprehensive income financial assets (IFRS 9, covered in
Chapter 9).

^Presentation of other comprehensive income

The amendments to IAS 1 (revised) change how items of OCI are presented in the financial statements – they do not change which items should be presented in OCI. In principle, items of OCI must be classified as follows:  Items that might be reclassified (or recycled) to profit or loss in subsequent accounting periods – Foreign exchange gains and losses arising on translation of a foreign operation (IAS 21) (not on FR syllabus) – Effective parts of cash flow hedging arrangements (IAS 39) (not on FR syllabus) – Remeasurement of debt instruments designated to be classified as fair value through OCI (IFRS 9, Chapter 9)  Items that will not be reclassified (or recycled) to profit or loss in subsequent accounting periods – Changes in revaluation surplus (IAS 16, Chapter 2 & IAS 38, Chapter 3) – Remeasurement of equity instruments designated to be classified as fair value through OCI (IFRS 9, Chapter 9)

IAS 1 Presentation of Financial Statements requires that you prepare either:
1 A statement of profit or loss and other comprehensive income showing
total comprehensive income, or
2 A statement of profit or loss showing the realised profit or loss for the
period PLUS a statement showing other comprehensive income.