#cfa-level-1 #reading-22-financial-statement-analysis-intro
Under IFRS, when comprehensive income is presented in two statements, the statement of comprehensive income begins with the profit or loss from the income statement and then presents the components of other comprehensive income.
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Open itensive income includes all items that impact owners’ equity but are not the result of transactions with shareowners. Some of these items are included in the calculation of net income, and some are included in other comprehensive income (OCI). <span>Under IFRS, when comprehensive income is presented in two statements, the statement of comprehensive income begins with the profit or loss from the income statement and then presents the components of other comprehensive income. Although US generally accepted accounting principles (US GAAP) indicate a preference for this type of presentation when a single statement of comprehensive income is not presented, theyOriginal toplevel document
Statement of comprehensive income industry?
Answering such questions requires the analyst to gather, analyze, and interpret information from a number of sources, including, but not limited to, the income statement.
<span>3.1.2.2. Other Comprehensive Income
Comprehensive income includes all items that impact owners’ equity but are not the result of transactions with shareowners. Some of these items are included in the calculation of net income, and some are included in other comprehensive income (OCI). Under IFRS, when comprehensive income is presented in two statements, the statement of comprehensive income begins with the profit or loss from the income statement and then presents the components of other comprehensive income. Although US generally accepted accounting principles (US GAAP) indicate a preference for this type of presentation when a single statement of comprehensive income is not presented, they permit companies to present the components of other comprehensive income in the statement of changes in equity.5
Exhibit 6 presents the statement of comprehensive income of the Volkswagen Group from its Annual Report 2009.
Exhibit 6. Statement of Comprehensive Income of the Volkswagen Group for the Period 1 January to 31 December
€ million 2009 2008 Profit after tax 911 4,688 Exchange differences on translating foreign operations: Fair value changes recognized in other comprehensive income 917 –1,445 Transferred to profit or loss 57 Actuarial gains/losses –860 190 Cash flow hedges: Fair value changes recognized in other comprehensive income 683 1,054 Transferred to profit or loss –908 –1,427 Available-for-sale financial assets (marketable securities): Fair value changes recognized in other comprehensive income 200 –330 Transferred to profit or loss 71 100 Deferred taxes 216 145 Share of profits and losses of equity-accounted investments recognized directly in equity, after tax 30 –188 Other comprehensive income 406 –1,901 Total comprehensive income 1,317 2,787 Of which attributable to Shareholders of Volkswagen AG 1,138 3,310 Minority interests 179 –523
Exhibit 6 shows that other comprehensive income, although smaller in absolute terms than profit after tax (net income), had a significant effect on total comprehensive income. In 2009, other comprehensive income represented approximately 31 percent of total comprehensive income and was approximately 45 percent of the size of profit after tax (net income). In 2008, other comprehensive income was negative (a loss) and was approximately 41 percent of the size of profit after tax (net income) in absolute terms. The statement of comprehensive income will be discussed in greater detail in a later reading. The next section briefly describes the statement of changes in equity.
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