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c3 Statement of Comprehensive Income

The document outlines the Statement of Comprehensive Income, detailing the components of profit or loss and other comprehensive income (OCI) as per Philippine Financial Reporting Standards. It explains the classification and presentation of OCI, including the two approaches for presenting comprehensive income. Additionally, it describes sources of income, components of expenses, and classifications of expenses related to distribution, administration, and other categories.

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Lea Zorca
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1 views

c3 Statement of Comprehensive Income

The document outlines the Statement of Comprehensive Income, detailing the components of profit or loss and other comprehensive income (OCI) as per Philippine Financial Reporting Standards. It explains the classification and presentation of OCI, including the two approaches for presenting comprehensive income. Additionally, it describes sources of income, components of expenses, and classifications of expenses related to distribution, administration, and other categories.

Uploaded by

Lea Zorca
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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STATEMENT OF

COMPREHENSIVE
INCOME
COMPREHENSIVE INCOME IS THE CHANGE IN EQUITY
DURING A PERIOD RESULTING FROM TRANSACTIONS AND
OTHER EVENTS, OTHER THAN CHANGES RESULTING FROM
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS
OWNERS.
Profit or loss

Profit or loss is the total of income less


expenses, excluding the components of other
comprehensive income.
Other comprehensive income (OCI)
Other comprehensive income comprises items of
income and expense including reclassification
adjustments that are not recognized in profit or
loss as required or permitted by Philippine
Financial Reporting Standards
Components of other comprehensive
income
1. Unrealized gain or loss on equity investment measured at fair value through
OCI
2. Unrealized gain or loss on debt investment measured at fair value through OCI
3. Gain or loss from translating financial statements of a foreign operation
4. Revaluation surplus during the year
5. Unrealized gain or loss on derivative contracts designated as a cash flow hedge.
6. Remeasurements of a defined benefit plan
7. Change in fair value attributable to credit risk of a financial liability designated at
fair value through profit or loss
Presentation of other comprehensive income. PAS 1,
paragraph 82A, provides that the other comprehensive
income section shall present line items for amounts of other
comprehensive income in the period, classified by nature.

The line items for amounts of OCI shall be grouped as:


1.) OCI that will be reclassified subsequently to profit or loss
when specific conditions are met.
Note: Reclassification adjustments are amounts reclassified to
profit or loss in the current period that were recognized in other
comprehensive income in the current or previous periods.
2.) OCI that will not be reclassified subsequently to profit or loss
but to retained earnings.
Presentation of comprehensive income.
PAS 1, paragraph 81, provides that an entity has
two option of presenting comprehensive income,
namely:
1)Two-statement approach
a) An income statement showing the components of profit or
loss
b) A statement of comprehensive income beginning with profit
or loss as shown in the income statement plus or minus the
components of other comprehensive income.
2)Single statement approach. This is the combined statement showing
the components of profit or loss and components of other
comprehensive income in a single statement of comprehensive income.
SOURCES OF INCOME
a)Sales of merchandise to customers.
The income from sales shall include all sales to customers during the period
minus sales returns, allowances and discounts.
b)Rendering of services.
Income from rendering of services, among others, includes professional fees,
media advertising commissions, insurance agency commissions, admission fees
for artistic performance and tuition fees.
c)Use of entity resources.
This income includes interest, rent, royalty and dividend income.
d)Disposal of resources other than products.
Examples include gain on sale of investments, gain sale of property, plant and
equipment and gain on sale intangible assets.
COMPONENTS OF EXPENSES
a)Cost of goods sold or cost of sales
b)Distribution costs or selling expenses
c)Administrative expenses
d)Other expenses
e)Income tax expense
CLASSIFICATION OF EXPENSES
• Distribution cost or selling expenses constitute costs
which are directly related to selling advertising and
delivery of goods to customers.
• Administrative expenses constitute cost of
administering the business. These ordinarily include all
operating expenses not related to selling and cost of
goods sold.
• Other expenses are those expenses which are not
directly related to the distribution and administrative
function. The other expenses are the expenses and losses
from peripheral or incidental transactions of the entity.
Distribution costs include:
• a)Salesmen's salaries
• b)Sales commissions
• c)Traveling and marketing expenses
• d)Advertising and publicity expense
• e)Freight out
• f)Depreciation of delivery equipment and store equipment
Administrative expenses include:
a)Doubtful accounts
b)Office salaries and expenses of general executives
c)Office supplies expense
d)Contributions to charity
e)Professional fees
f)Depreciation of office building and office equipment
g)Amortization of intangible assets
Other expenses include:

a)Loss on sale of trading investment


b)Loss on sale of property, plant and equipment
c)Loss on sale of noncurrent investment
d)Loss on sale of intangible asset
e) Casualty loss from earthquake, typhoon, hurricane,
tsunami, flood, fire, storm surge and other natural disaster
f)Expropriation loss

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