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Conceptual framework — Presentation in the statement of comprehensive income – profit or loss and OCI

Date recorded:

The paper includes three approaches, with Approach 2 being a new one:

  1. all items are recognised in profit or loss unless presenting an item in OCI provides more relevant information; items are recycled as and when it results in relevant information about financial performance (i.e. recycling always takes place, it is only a matter of timing);
  2. as above, but recycling takes place only if it results in relevant information (i.e. current model); and
  3. a single statement of comprehensive income with no sub-total for profit or loss; recycling does not apply.

It appeared that a few Board members supported Approach 1 as they believed it introduced a discipline to whether an item should be in OCI in the first place because it would get recycled later anyway.

Other Board members did not like Approach 1 because they believed that recycling is not always meaningful.

It was pointed out that the Board members did not need to come to a tentative view for the DP’s purposes.

Overall, the Board members felt that Approach 3 would not get much support from respondents.

It was suggested that the Approaches were summarised differently: Approach 1 OCI and recycling with added variations on when an item goes to OCI and when it gets recycled and Approach 3 no OCI. Approach 2 will be taken out.

The Chairman said that the best outcome for the Board from this project would be to introduce as much discipline as possible. For example, OCI cannot apply to non-recurring items. It would not be good outcome if the Board said that ‘anything goes’.

In terms of titles for the line items in the statement of comprehensive income: there was a proposal to change the label of Total Comprehensive Income to Total Income – this proposal did not get support from the Board. Another proposal about to re-label Other Comprehensive Income as Remeasurements Outside of Profit or Loss – the Board supported this proposal.

The Staff will revise the paper based on the feedback from the discussion.

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