What is the comprehensive profit and loss statement?
In what cases is it used?
What are the things used in this case?
What is the difference with the profit and loss statement?
The purpose of preparing the profit and loss statement and the comprehensive profit and loss statement is to present all the incomes and expenses identified during a financial period. The main focus of the profit and loss statement is the operating income and expenses. Incomes and expenses are not reflected in the profit and loss statement only in cases that are specifically referred to the equity account according to accounting standards. Since it is necessary to be aware of all aspects of the financial performance of the business unit during the period in order to make economic decisions of the users of the financial statements, it is necessary to consider all the incomes and expenses identified during that period. Therefore, it is necessary to prepare and present a new basic financial statement with the title “Comprehensive Profit and Loss Statement” in order to show the amount of increase or decrease in equity due to the various incomes and expenses of the period. Since the comprehensive profit and loss statement includes all incomes. And the identified expenses, both realized and unrealized, the net profit or loss of the financial period is reflected as the first item in the comprehensive profit and loss statement. This means that the statement of profit and loss for the period shows one of the items of the statement of comprehensive profit and loss in detail, and other recognized income and expenses are reflected separately in the statement of comprehensive profit and loss. Other recognized income and expenses include The following are:
A. Unrealized incomes and expenses resulting from changes in the value of assets and liabilities that are basically maintained in order to enable the business unit to carry out operations continuously and are considered directly related to the rights of capital owners according to accounting standards (such as incomes and expenses arising from from the reevaluation of tangible fixed assets).
B. Incomes and expenses that according to the accounting standards are directly included in the equity of the owners of the capital (such as the differences resulting from the exchange of foreign currency assets and liabilities subject to Article 136 of the Public Accounts Law).
The items listed in rows A and B constitute the comprehensive profit or loss of the year. Annual adjustments (including the accumulated effects of changes in accounting procedures and correction of mistakes) are deducted or added to the comprehensive profit or loss of the year, as the case may be, to obtain the comprehensive profit or loss recognized between the date of the financial statements of the previous period and the end of the current financial period.
Examples of items included in the comprehensive profit and loss statement are as follows:
Net profit for the year ***
Unrealized surplus due to revaluation of fixed assets *
Unrealized profit (loss) of long-term investment *
Comprehensive profit of the financial year *
Deducted: annual adjustments (*)
Recognized comprehensive income from the previous reporting date ***
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Group of accountants, auditors, Tabriz
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