Currently business entities have a choice of presenting the results of their business operations either in a single, continuous statement of comprehensive income or as two separate statements comprising a statement of profit or loss followed by a statement of other comprehensive income. The International Accounting Standards Board issued an Exposure Draft (ED) in May 2010 seeking to eliminate the latter option of presenting two separate statements. If approved, the amendments will take effect on 01 Jan 2011.
The proposed amendments will not change items recognised in the statement of profit or loss or in other comprehensive income (OCI), nor will it affect the way performance indicators such as earning per share are calculated. The ED has proposed the title ‘Statement of Profit or Loss and Other Comprehensive Income’ for the combined single statement. A notable change proposed in the ED is to group and present items in the OCI in to:
- Items that might be reclassified to profit or loss in subsequent periods; and
- Items that will not be reclassified to profit or loss in subsequent periods
