Raphael Gordon, Guest Writer

The International Accounting Standards Board (IASB) has revised its standard on the Presentation of Financial Statements, as part of its project to enhance the usefulness of financial information by addressing presentation and display issues.

The revised IAS 1, which was published September 6, 2007, will supersede the 2003 version and its 2005 amendment, for annual periods beginning on or after January 1, 2009.

Earlier application is permitted.

The standard introduces the 'Statement of Comprehensive Income' which is presented in either one statement, that is a statement of comprehensive income; or two, that is an income statement and a statement beginning with profit or loss and displaying components of other comprehensive income.

Changes in equity

Total comprehensive income represents the changes in equity during a period, other than those changes resulting from transactions with owners in their capacity as owners.

The revised standard prohibits presenting components of comprehensive income in the statement of changes in equity.

Other requirements that are not in the current IAS are as follows:

A statement of financial position - formerly 'balance sheet' - is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the reclassification of items in the financial statements.

Reclassification adjustments to profit or loss of amounts previously recognised in other comprehensive income are disclosed for each component of other comprehensive income.

Income tax is disclosed for each component of other comprehensive income.

Dividends and related per-share amounts are disclosed either on the face of the statement of changes in equity or in the notes.

The statement of comprehensive income in the revised standard is a change from the current IAS 1 requirement to present an income statement and a statement of changes in equity showing either all changes in equity, other than those arising from transactions with equity holders acting in their capacity as equity holders, or a statement of recognised income and expense.

The name change from 'balance sheet' to 'financial position' in the revised standard is consistent with the term used in the opinion paragraph of the current auditors' report.

Raphael E. Gordon is the managing partner of KPMG in Jamaica and chairman of KPMG CARICOM. Email: regordon@kpmg.com.jm