Intermediate

Accounting

Prepared by
Coby Harmon
4-1
University of California, Santa Barbara
 Income Statement and
4 Related Information

Intermediate Accounting
14th Edition

Kieso, Weygandt, and Warfield

4-2
 Learning Objectives

1. Understand the uses and limitations of an income statement.

2. Prepare a single-step income statement.

3. Prepare a multiple-step income statement.

4. Explain how to report irregular items.

5. Explain intraperiod tax allocation.

6. Identify where to report earnings per share information.

7. Prepare a retained earnings statement.

8. Explain how to report other comprehensive income.

4-3
 Income Statement and Related Information

Format of the
Income Reporting Special
Income
Statement Irregular Items Reporting Issues
Statement

Usefulness Elements Discontinued Intraperiod tax

Limitations Single-step operations allocation
Quality of Multiple-step Extraordinary items Earnings per share
Earnings Condensed income Unusual gains and Retained earnings
statements losses statement
Changes in Comprehensive
accounting income
principles
Changes in
estimates
Corrections of
errors

4-4
 Income Statement

Usefulness
 Evaluate past performance.

 Predicting future performance.

 Help assess the risk or uncertainty of

achieving future cash flows.

4-5 LO 1 Understand the uses and limitations of an income statement.

 Income Statement

Limitations
 Companies omit items that cannot be
measured reliably.

 Income is affected by the accounting

methods employed.

 Income measurement involves

judgment.

4-6 LO 1 Understand the uses and limitations of an income statement.

 Income Statement

Quality of Earnings
Companies have incentives to manage income to meet or
beat Wall Street expectations, so that

 market price of stock increases and

 value of stock options increase.

Quality of earnings is reduced if earnings management

results in information that is less useful for predicting future
earnings and cash flows.

4-7 LO 1 Understand the uses and limitations of an income statement.

 Format of the Income Statement

Elements of the Income Statement

Revenues – Inflows or other enhancements of assets or
settlements of its liabilities that constitute the entity’s ongoing
major or central operations.

Examples of Revenue Accounts

 Sales  Dividend revenue

 Fee revenue  Rent revenue

 Interest revenue

4-8 LO 1 Understand the uses and limitations of an income statement.

 Format of the Income Statement

Elements of the Income Statement

Expenses – Outflows or other using-up of assets or
incurrences of liabilities that constitute the entity’s ongoing
major or central operations.

Examples of Expense Accounts

 Cost of goods sold  Rent expense

 Depreciation  Salary expense

expense

 Interest expense

4-9 LO 1 Understand the uses and limitations of an income statement.

 Format of the Income Statement

Elements of the Income Statement

Gains – Increases in equity (net assets) from peripheral or
incidental transactions.
Losses - Decreases in equity (net assets) from peripheral or
incidental transactions.

Gains and losses can result from

 sale of investments or plant assets,
 settlement of liabilities,
 write-offs of assets.

4-10 LO 1 Understand the uses and limitations of an income statement.

 Single-Step Format

Single-Step Income Income Statement (in thousands)

Revenues:
Statement Sales $ 285,000
Interest revenue 17,000
Total revenue 302,000
Revenues Single- Expenses:
Expenses Step Cost of goods sold 149,000
Selling expense 10,000
Net Income Administrative expense 43,000
Interest expense 21,000
Income tax expense 24,000
No distinction between Total expenses 247,000
Operating and Non-operating Net income $ 55,000
categories.
Earnings per share $ 0.75

4-11 LO 2 Prepare a single-step income statement.

 E4-4: Prepare an income Single-Step Format
statement from the data below.
Income Statement
For the year ended Dec. 31, 2012
Administrative expense: Revenues:
Officers' salaries $ 4,900 Sales $ 96,500
Depreciation 3,960 Rental revenue 17,230
Cost of goods sold 63,570 Total revenues 113,730
Rental revenue 17,230 Expenses:
Selling expense: Cost of goods sold 63,570
Transportation-out 2,690 Selling expense 17,150
Sales commissions 7,980 Administrative exense 8,860
Depreciation 6,480 Interest expense 1,860
Sales 96,500 Income tax expense 7,580
Income tax expense 7,580 Total expenses 99,020
Interest expense 1,860 Net income $ 14,710

4-12 LO 2 Prepare a single-step income statement.

 Single-Step Format

Review
The single-step income statement emphasizes

a. the gross profit figure.

b. total revenues and total expenses.

c. extraordinary items more than it is emphasized in the

multiple-step income statement.

d. the various components of income from continuing

operations.

4-13 LO 2 Prepare a single-step income statement.

 Format of the Income Statement

Multiple-Step Income Statement

 Separates operating transactions from nonoperating
transactions.

 Matches costs and expenses with related revenues.

 Highlights certain intermediate components of

income that analysts use.

4-14 LO 3 Prepare a multiple-step income statement.

 Multiple-Step Format

Intermediate Components of the Income Statement

1. Operating section

2. Nonoperating section

3. Income tax

4. Discontinued operations

5. Extraordinary items

6. Earnings per share

4-15 LO 3 Prepare a multiple-step income statement.

 Multiple-Step Format
Income Statement (in thousands)
The presentation Sales $ 285,000
divides information Cost of goods sold 149,000
into major sections. Gross profit 136,000
Operating expenses:
Selling expenses 10,000
1. Operating Section Administrative expenses 43,000
Total operating expense 53,000
Income from operations 83,000
Other revenue (expense):
2. Nonoperating Interest revenue 17,000
Section Interest expense (21,000)
Total other (4,000)
Income before taxes 79,000
3. Income tax Income tax expense 24,000
Net income $ 55,000

4-16 LO 3 Prepare a multiple-step income statement.

 Illustration (E4-4): Prepare Multiple-Step Format
an income statement from the
data below. Income Statement
For the year ended Dec. 31, 2012
Administrative expense: Sales $ 96,500
Officers' salaries $ 4,900 Cost of goods sold 63,750
Depreciation 3,960 Gross profit 32,750
Cost of goods sold 63,750 Operating Expenses:
Rental revenue 17,230 Selling expense 17,150
Selling expense: Administrative exense 8,860
Transportation-out 2,690 Total operating expenses 26,010
Sales commissions 7,980 Income from operations 6,740
Depreciation 6,480 Other revenue (expense):
Sales 96,500 Rental revenue 17,230
Income tax expense 7,580 Interest expense (1,860)
Interest expense 1,860 Total other 15,370
Income before tax 22,110
Income tax expense 7,580
Net income $ 14,530

4-17
 Multiple-Step Format

Review
A separation of operating and non operating activities of a
company exists in

a. both a multiple-step and single-step income statement.

b. a multiple-step but not a single-step income statement.

c. a single-step but not a multiple-step income statement.

d. neither a single-step nor a multiple-step income

statement.

4-18 LO 3 Prepare a multiple-step income statement.

 Reporting Irregular Items

Companies are required to report irregular items in the

financial statements so users can determine the long-run
earning power of the company. Illustration 4-5
Number of Irregular Items
Reported in a Recent Year
by 500 Large Companies

4-19 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Irregular items fall into six categories

1. Discontinued operations.

2. Extraordinary items.

3. Unusual gains and losses.

4. Changes in accounting principle.

5. Changes in estimates.

6. Corrections of errors.

4-20 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Discontinued Operations
Occurs when,

(a) company eliminates the

 results of operations and

 cash flows of a component.

(b) there is no significant continuing involvement in that

component.

Amount reported “net of tax.”

4-21 LO 4 Explain how to report irregular items.

 Reporting Discontinued Operations
Illustration: KC Corporation had after tax income from continuing
operations of $55,000,000 for the year. During the year, it disposed
of its restaurant division at a pretax loss of $270,000. Prior to
disposal, the division operated at a pretax loss of $450,000 for the
year. Assume a tax rate of 30%. Prepare a partial income
statement for KC.

Income from continuing operations $55,000,000

Discontinued operations:
Loss from operations, net of $135,000 tax 315,000
Loss on disposal, net of $81,000 tax 189,000
Total loss on discontinued operations 504,000
Net income $54,496,000

4-22 LO 4 Explain how to report irregular items.

 Reporting Discontinued Operations

Discontinued Income Statement (in thousands)

Sales $ 285,000
Operations are reported
Cost of goods sold 149,000
after “Income from Gross profit 136,000
continuing operations.”
Interest expense (21,000)
Total other (4,000)
Income before taxes 79,000
Previously labeled as Income tax expense 24,000
Income from continuing operations 55,000
“Net Income”.
Discontinued operations:
Loss from operations, net of tax 315
Loss on disposal, net of tax 189
Moved to Total loss on discontinued operations 504
Net income $ 54,496

4-23 LO 4
 Reporting Irregular Items

Extraordinary items are nonrecurring material items that

differ significantly from a company’s typical business activities.

Extraordinary Item must be both of an

 Unusual Nature and

 Occur Infrequently

Company must consider the environment in which it operates.

Amount reported “net of tax.”

4-24 LO 4 Explain how to report irregular items.

 Reporting Extraordinary Items
Are these items Extraordinary?
(a) A large portion of a tobacco manufacturer’s crops
are destroyed by a hail storm. Severe damage from
YES
hail storms in the locality where the manufacturer
grows tobacco is rare.

(b) A citrus grower's Florida crop is damaged by frost. NO

(c) A company sells a block of common stock of a
publicly traded company. The block of shares, which
YES
represents less than 10% of the publicly-held
company, is the only security investment the
company has ever owned.

4-25 LO 4 Explain how to report irregular items.

 Reporting Extraordinary Items
Are these items Extraordinary?
(d) A large diversified company sells a block of shares
from its portfolio of securities which it has acquired
NO
for investment purposes. This is the first sale from
its portfolio of securities.

(e) An earthquake destroys one of the oil refineries

YES
owned by a large multi-national oil company.
Earthquakes are rare in this geographical location.

(f) A company experiences a material loss in the

repurchase of a large bond issue that has been NO
outstanding for 3 years. The company regularly
repurchases bonds of this nature.
4-26 LO 4
 Reporting Extraordinary Items

Illustration: KC Corporation had after tax income from continuing

operations of $55,000,000 during the year. In addition, it suffered
an unusual and infrequent pretax loss of $770,000 from a volcano
eruption. The corporation’s tax rate is 30%. Prepare a partial
income statement for KC Corporation beginning with income from
continuing operations.

Income from continuing operations $55,000,000

Extraordinary loss, net of $231,000 tax 539,000
Net income $54,461,000

($770,000 x 30% = $231,000 tax)

4-27 LO 4 Explain how to report irregular items.

 Reporting Extraordinary Items

Extraordinary Items Income Statement (in thousands)

Sales $ 285,000
are reported after
Cost of goods sold 149,000
“Income from continuing Gross profit 136,000
operations.”
Other revenue (expense):
Interest revenue 17,000
Interest expense (21,000)
Total other (4,000)
Income before taxes 79,000
Previously labeled as Income tax expense 24,000
“Net Income”. Income from continuing operations 55,000
Extraordinary loss, net of tax 539
Net income $ 54,461
Moved to

4-28 LO 4
 Reporting Extraordinary Items

Illustration 4-8
Income Statement Presentation
of Extraordinary Items

4-29 LO 4
 Reporting Irregular Items

Reporting when both Income Statement (in thousands)

Sales $ 285,000
Discontinued
Cost of goods sold 149,000
Operations and Gross profit 136,000
Extraordinary Items
Income before taxes 79,000
are present.
Income tax expense 24,000
Income from continuing operations 55,000
Discontinued operations:
Discontinued Loss from operations, net of tax 315
Operations Loss on disposal, net of tax 189
Total loss on discontinued operations 504
Income before extraordinary item 54,496
Extraordinary Items Extraordinary loss, net of tax 539
Net income $ 54,496

4-30 LO 4
 Reporting Irregular Items

Review
Irregular transactions such as discontinued operations and
extraordinary items should be reported separately in

a. both a single-step and multiple-step income

statement.

b. a single-step income statement only.

c. a multiple-step income statement only.

d. neither a single-step nor a multiple-step income

statement.

4-31 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Unusual Gains and Losses

Material items that are unusual or infrequent, but not both,
should be reported in a separate section just above “Income
from continuing operations before income taxes.”

Examples can include:

 Write-downs of inventories

 Foreign exchange transaction gains and losses

The Board prohibits net-of-tax treatment for these items.

4-32 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Unusual Gains and Losses Illustration 4-9

Income Statement
Presentation of Unusual
Charges

4-33 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Changes in Accounting Principles

 Retrospective adjustment.
 Cumulative effect adjustment to beginning retained
earnings.
 Approach preserves comparability.
 Examples include:
► change from FIFO to average cost.
► change from the percentage-of-completion to the
completed-contract method.

4-34 LO 4 Explain how to report irregular items.

 Reporting Irregular Items
Change in Accounting Principle: Gaubert Inc. decided in
March 2012 to change from FIFO to weighted-average inventory
pricing. Gaubert’s income before taxes, using the new weighted-
average method in 2012, is $30,000.

Illustration 4-10
Pretax Income Data
Calculation of a Change in
Accounting Principle

Illustration 4-11
Income Statement
Presentation of a Change
in Accounting Principle
(Based on 30% tax rate)

4-35 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Changes in Estimate
 Accounted for in the period of change and future periods.
 Not handled retrospectively.
 Not considered errors or extraordinary items.
 Examples include:
► Useful lives and salvage values of depreciable assets.
► Allowance for uncollectible receivables.
► Inventory obsolescence.

4-36 LO 4 Explain how to report irregular items.

 Change in Estimate Example

Change in Estimate: Arcadia HS, purchased equipment for

$510,000 which was estimated to have a useful life of 10 years
with a salvage value of $10,000 at the end of that time.
Depreciation has been recorded for 7 years on a straight-line
basis. In 2012 (year 8), it is determined that the total estimated
life should be 15 years with a salvage value of $5,000 at the
end of that time.
Questions:
 What is the journal entry to correct the prior years’
depreciation?
 Calculate the depreciation expense for 2012.
4-37 LO 4 Explain how to report irregular items.
 Change in Estimate Example After 7 years

Equipment cost $510,000 First, establish NBV

Salvage value - 10,000 at date of change in
Depreciable base 500,000 estimate.
Useful life (original) 10 years
Annual depreciation $ 50,000 x 7 years = $350,000

Balance Sheet (Dec. 31, 2011)

Fixed Assets:
Equipment $510,000
Accumulated depreciation 350,000
Net book value (NBV) $160,000

4-38 LO 4 Explain how to report irregular items.

 Change in Estimate Example After 7 years

Net book value $160,000 Depreciation

Salvage value (new) 5,000 Expense calculation
Depreciable base 155,000 for 2012.
Useful life remaining 8 years
Annual depreciation $ 19,375

Journal entry for 2012

Depreciation expense 19,375

Accumulated depreciation 19,375

4-39 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Corrections of Errors
 Result from:

► mathematical mistakes.

► mistakes in application of accounting principles.

► oversight or misuse of facts.

 Corrections treated as prior period adjustments.

 Adjustment to the beginning balance of retained earnings.

4-40 LO 4 Explain how to report irregular items.

 Reporting Irregular Items

Corrections of Errors: To illustrate, in 2013, Hillsboro Co.

determined that it incorrectly overstated its accounts
receivable and sales revenue by $100,000 in 2010. In 2013,
Hillboro makes the following entry to correct for this error
(ignore income taxes).

Retained earnings 100,000

Accounts receivable 100,000

4-41 LO 4 Explain how to report irregular items.

 Special Reporting Issues

Intraperiod Tax Allocation

Relates the income tax expense to the specific items that give
rise to the amount of the tax expense.

Income tax is allocated to the following items:

(1) Income from continuing operations before tax.

(2) Discontinued operations.

(3) Extraordinary items.

4-42 LO 5 Explain intraperiod tax allocation.

 Special Reporting Issues

Intraperiod Tax Allocation

Extraordinary Gain: Schindler Co. has income before income
tax and extraordinary item of $250,000. It has an extraordinary
gain of $100,000 from a condemnation settlement received on
one its properties. Assuming a 30 percent income tax rate.
Illustration 4-13

4-43 LO 5 Explain intraperiod tax allocation.

 Special Reporting Issues

Intraperiod Tax Allocation

Extraordinary Loss: Schindler Co. has income before income
tax and extraordinary item of $250,000. It has an extraordinary
loss from a major casualty of $100,000. Assuming a 30 percent
income tax rate.
Illustration 4-14

4-44 LO 5 Explain intraperiod tax allocation.

 Example of Intraperiod Tax Allocation
Note: losses reduce
Income Statement (in thousands)
the total tax
Sales $ 285,000
Cost of goods sold 149,000
Calculation of
Total other (4,000) Total Tax
Income from cont. oper. before taxes 79,000
Income tax expense 24,000 $24,000
Income from continuing operations 55,000
Discontinued operations:
Loss on operations, net of $135 tax 315 (135)
Loss on disposal, net of $61 tax 189 (61)
Total loss on discontinued operations 504
Income before extraordinary item 54,496
Extraordinary loss, net of $231 tax 539 (231)
Net income $ 53,957
$23,573
4-45 LO 5 Explain intraperiod tax allocation.
 Special Reporting Issues

Earnings Per Share

Net income - Preferred dividends

Weighted average number of shares outstanding

 An important business indicator.

 Measures the dollars earned by each share of common

stock.

 Must be disclosed on the the income statement.

4-46 LO 6 Identify where to report earnings per share information.

 Special Reporting Issues

Earnings Per Share (BE4-8): In 2012, Hollis Corporation

reported net income of $1,000,000. It declared and paid preferred
stock dividends of $250,000. During 2012, Hollis had a weighted
average of 190,000 common shares outstanding. Compute
Hollis’s 2012 earnings per share.

Net income - Preferred dividends

Weighted average number of shares outstanding

$1,000,000 - $250,000
= $3.95 per share
190,000

4-47 LO 6 Identify where to report earnings per share information.

 Special Reporting Issues

Illustration 4-17

Divide by
weighted-
average
shares
outstanding

EPS
4-48 LO 6
 Special Reporting Issues

Retained Earnings Statement

Increase Decrease
 Net income  Net loss
 Change in accounting  Dividends
principle  Change in accounting
 Error corrections principles
 Error corrections

4-49 LO 7 Prepare a retained earnings statement.

 Special Reporting Issues

Woods, Inc.
Statement of Retained Earnings
For the Year Ended December 31, 2012

Balance, January 1 $ 1,050,000

Net income 360,000
Dividends (300,000)
Balance, December 31 $ 1,110,000

Before issuing the report for the year ended December 31, 2012, you
discover a $50,000 error (net of tax) that caused 2011 inventory to be
overstated (overstated inventory caused COGS to be lower and thus net
income to be higher in 2011). Would this discovery have any impact on the
reporting of the Statement of Retained Earnings for 2012?

4-50 LO 7 Prepare a retained earnings statement.

 Special Reporting Issues

Woods, Inc.
Statement of Retained Earnings
For the Year Ended December 31, 2012

Balance, January 1 $ 1,050,000

Prior period adjustment - error correction (50,000)
Balance, January 1 (restated) 1,000,000
Net income 360,000
Dividends (300,000)
Balance, December 31 $ 1,060,000

4-51 LO 7 Prepare a retained earnings statement.

 Special Reporting Issues

Restrictions on Retained Earnings

Disclosed

 In notes to the financial statements.

 As Appropriated Retained Earnings.

4-52 LO 7 Prepare a retained earnings statement.

 Special Reporting Issues

Comprehensive Income
All changes in equity during a period except those resulting
from investments by owners and distributions to owners.

Includes:

 all revenues and gains, expenses and losses reported in

net income, and

 all gains and losses that bypass net income but affect
stockholders’ equity.

4-53 LO 8 Explain how to report other comprehensive income.

 Special Reporting Issues
Comprehensive Income
Income Statement (in thousands) Other Comprehensive
Sales
Cost of goods sold
$ 285,000
149,000 + Income
Gross profit 136,000  Unrealized gains and
Operating expenses:
losses on available-for-
Selling expenses 10,000
Administrative expenses 43,000
sale securities.
Total operating expense 53,000  Translation gains and
Income from operations 83,000 losses on foreign
Other revenue (expense):
currency.
Interest revenue 17,000
Interest expense (21,000)  Plus others
Total other (4,000)
Income before taxes 79,000
Reported in Stockholders’
Income tax expense 24,000
Net income $ 55,000 Equity

4-54 LO 8 Explain how to report other comprehensive income.

 Special Reporting Issues

Review
Gains and losses that bypass net income but affect
stockholders' equity are referred to as

a. comprehensive income.

b. other comprehensive income.

c. prior period income.

d. unusual gains and losses.

4-55 LO 8 Explain how to report other comprehensive income.

 Special Reporting Issues

Companies must display the components of other

comprehensive income in one of three ways:

1. A second separate income statement;

2. A combined income statement of comprehensive

income; or

3. As part of the statement of stockholders’ equity

4-56 LO 8 Explain how to report other comprehensive income.

 Special Reporting Issues

Comprehensive Illustration 4-19

Income

Second income
statement

4-57
LO 8
 Special Reporting Issues

Comprehensive V. Gill Inc.

Income Combined Statement of Comprehensive Income
For the Year Ended December 31, 2012
Combined
statement Sales revenue $ 800,000
Cost of goods sold 600,000
Gross profit 200,000
Operating expenses 90,000
Net income 110,000
Unrealized holding gain, net of tax 30,000
Comprehensive income $ 140,000

4-58
LO 8
 Special Reporting Issues
Comprehensive Income – Statement of Stockholder’s Equity
Illustration 4-20

4-59 LO 8 Explain how to report other comprehensive income.

 Special Reporting Issues
Comprehensive Income – Balance Sheet Presentation

Illustration 4-21
Presentation of
Accumulated Other
Comprehensive
Income in the
Balance Sheet

Regardless of the display format used, the accumulated other

comprehensive income of $90,000 is reported in the stockholders’
equity section of the balance sheet.
4-60 LO 8 Explain how to report other comprehensive income.
 Special Reporting Issues

Review
The FASB decided that the components of other
comprehensive income must be displayed

a. in a second separate income statement.

b. in a combined income statement of comprehensive

income.

c. as a part of the statement of stockholders‘ equity.

d. Any of these options is permissible.

4-61 LO 8 Explain how to report other comprehensive income.

 RELEVANT FACTS
 Presentation of the income statement under GAAP follows either a
single-step or multiple-step format. IFRS does not mention a single-
step or multiple-step approach. Extraordinary items are prohibited
under IFRS.
 Under IFRS, companies must classify expenses by either nature or
function. GAAP does not have that requirement, but the U.S. SEC
requires a functional presentation.
 IFRS identifies certain minimum items that should be presented on
the income statement. GAAP has no minimum information
requirements. However, the SEC rules have more rigorous
presentation requirements.

4-62
 RELEVANT FACTS
 IFRS does not define key measures like income from operations.
SEC regulations define many key measures and provide
requirements and limitations on companies reporting non-
GAAP/IFRS information.
 GAAP does not require companies to indicate the amount of net
income attributable to non-controlling interest.
 GAAP and IFRS follow the same presentation guidelines for
discontinued operations, but IFRS defines a discontinued operation
more narrowly. Both standard- setters have indicated a willingness
to develop a similar definition to be used in the joint project on
financial statement presentation.

4-63
 RELEVANT FACTS
 Both GAAP and IFRS have items that are recognized in equity as
part of comprehensive income but do not affect net income. GAAP
provides three possible formats for presenting this information:
single income statement, combined statement of comprehensive
income, in the statement of stockholders’ equity. Most companies
that follow GAAP present this information in the statement of
stockholders’ equity. IFRS allows a separate statement of
comprehensive income or a combined statement.
 Under IFRS, revaluation of property, plant, and equipment, and
intangible assets is permitted and is reported as other
comprehensive income. The effect of this difference is that
application of IFRS results in more transactions affecting equity but
not net income.
4-64
 IFRS SELF-TEST QUESTION
Which of the following is not reported in an income statement
under IFRS?

a. Discontinued operations.

b. Extraordinary items.

c. Cost of goods sold.

d. Income tax.

4-65
 IFRS SELF-TEST QUESTION
Which of the following statements is correct regarding income
reporting under IFRS?
a. IFRS does not permit revaluation of property, plant, and
equipment, and intangible assets.
b. IFRS provides the same options for reporting comprehensive
income as GAAP.
c. Companies must classify expenses either by nature or function.
d. IFRS provides a definition for all items presented in the income
statement.

4-66
 IFRS SELF-TEST QUESTION
Which of the following is not an acceptable way of displaying the
components of other comprehensive income under IFRS?

a. Within the statement of retained earnings.

b. Second income statement.

c. Combined statement of comprehensive income.

d. All of the above are acceptable.

4-67
 Copyright

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4-68