Revised IAS 1 requires statement of comprehensive income

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06 Sep 2007

The IASB has issued a revised IAS 1 'Presentation of Financial Statements'.

The main changes from the previous version are to require that an entity must:

  • Present all non-owner changes in equity (that is, 'comprehensive income' – see box below) either in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income may not be presented in the statement of changes in equity.
  • Present a statement of financial position (balance sheet) as at the beginning of the earliest comparative period in a complete set of financial statements when the entity applies an accounting policy retrospectively or makes a retrospective restatement.
  • Disclose income tax relating to each component of other comprehensive income.
  • Disclose reclassification adjustments relating to components of other comprehensive income.

IAS 1 changes the titles of financial statements as they will be used in IFRSs:

  • 'balance sheet' will become 'statement of financial position'
  • 'income statement' will become 'statement of comprehensive income'
  • 'cash flow statement' will become 'statement of cash flows').
Entities are not required to use the new titles in their financial statements. All existing Standards and Interpretations are being amended to reflect the new terminology. The revised IAS 1 resulted in consequential amendments to 5 IFRSs, 23 IASs, and 10 Interpretations.

The revised IAS 1 is effective for annual periods beginning on or after 1 January 2009. Early adoption is permitted. Click for Press Release (PDF 17k).

Comprehensive income for a period includes profit or loss for that period plus other comprehensive income recognised in that period. The components of other comprehensive income include:

  • changes in revaluation surplus (IAS 16 and IAS 38).
  • actuarial gains and losses on defined benefit plans recognised in accordance with paragraph 93A of IAS 19.
  • gains and losses arising from translating the financial statements of a foreign operation (IAS 21).
  • gains and losses on remeasuring available-for-sale financial assets (IAS 39).
  • the effective portion of gains and losses on hedging instruments in a cash flow hedge (IAS 39).


Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.