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Contents
5.2 Small companies – exemptions.
5.2.1 Extract from FRS102: Section 5.1A.
5.3 Presentation of total comprehensive income.
5.3.1 Extract from FRS102: Section 5.2-5.3.
5.3.2.2 Implications of changing between the two layouts.
5.4 Single-statement approach.
5.4.1 Extract from FRS102: Section 5.5-5.6, Section 5.7D and Section 5.9.
5.4.2.2.1 Profit and loss account/income statement.
5.4.2.2.2 Other comprehensive income.
5.4.2.3 Practical application of format 1 showing the single statement approach for group.
5.4.2.3.1 Practical application of single statement approach for an individual entity.
5.5.1 Extract from FRS102: Section 5.7-5.7D and Section 5.9.
5.5.2.2.1 Profit and loss account/income statement formats.
5.5.2.2.2 Other comprehensive income – statement of comprehensive income.
5.5.2.3 Practical application of the two statement approach showing format 1.
5.5.2.3.1 Two statement approach for a Group.
5.5.2.3.2 Two statement approach for an individual entity (i.e. not group accounts).
5.6 Alternative profit and loss format.
5.6.1 Extract from FRS102: Section 5.7B-5.7C.
5.7.1 Extract from FRS102: Section 5.7E-5.7F.
5.7.2.1 Discontinued operation and when it is to be considered to be discontinued.
5.7.2.2 Disclosure requirements for discontinued operations.
5.8 Prior year/period adjustments.
5.8.1 Extract from FRS102: Section 5.8.
5.9 Exceptional items and extraordinary items.
5.9.1 Extract from FRS102: Section 5.9A and Section 5.10-5.10B.
5.9.2.1.1 Exceptional items defined.
5.9.2.1.2 Examples of exceptional items.
5.9.2.1.4 Disclosure requirements of exceptional items in the notes.
5.9.2.1.5 Illustration of disclosure of exceptional items.
5.9.2.1.5.1 Exceptional items shown on face of profit and loss account.
5.9.2.1.5.2 Exceptional items shown in notes and not of the face of profit and loss account.
5.9.2.1.5.3 Exceptional itekm accounting policy disclosure.
5.10.1 Extract from FRS102: Section 5.9B.
5.11.1 Extract from FRS102: Section 5.11.
5.11.2.2 Analysis by function of expense.
5.11.2.2.2 Format 1 Companies Act 2014 – for Republic of Ireland entities.
5.11.2.2.2 Format 1 of Companies Act 2006 – for UK entities.
5.11.2.3 Analysis by nature of expense.
5.11.2.3.1 Format 2 of Companies Act 2006 – for UK entities.
5.11.2.3.2 Format 2 of Companies Act 2014 for Republic of Ireland entities.
5.12.1.2 For UK Parent Company.
5.12.1.3 For Republic of Ireland Parent Company.
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5.4 Single-statement approach
5.4.1 Extract from FRS102: Section 5.5-5.6, Section 5.7D and Section 5.9.
5.5 An entity shall present, in the statement of comprehensive income, the items to be included in a profit and loss account in accordance with one of the following requirements:
(a) Part 1 General Rules and Formats of Schedule 1 to the Regulations;
(b) Part 1 General Rules and Formats of Schedule 2 to the Regulations;
(c) Part 1 General Rules and Formats of Schedule 3 to the Regulations; or
(d) Part 1 General Rules and Formats of Schedule 1 to the LLP Regulations.
The consolidated statement of comprehensive income of a group shall be presented in accordance with the requirements for a consolidated profit and loss account of Schedule 6 to the Regulations or Schedule 3 to the LLP Regulations.
5.5A In addition an entity shall include, in the statement of comprehensive income, line items that present the following amounts for the period:
(a) Classified by nature (excluding amounts in (b)), the components of other comprehensive income recognised as part of total comprehensive income outside profit or loss as permitted or required by this FRS. An entity may present the components of other comprehensive income either:
(i) net of related tax effects; or
(ii) before the related tax effects with one amount shown for the aggregate amount of income tax relating to those components.
(b) Its share of the other comprehensive income of associates and jointly controlled entities accounted for by the equity method.
(c) Total comprehensive income.
5.6 An entity shall present the following items as allocations of profit or loss and other comprehensive income in the statement of comprehensive income for the period:
(a) Profit or loss for the period attributable to:
(i) non-controlling interest; and
(ii) owners of the parent.
(b) Total comprehensive income for the period attributable to:
(i) non-controlling interest; and
(ii) owners of the parent.
5.7D In addition to the requirements of paragraphs 5.5 or 5.7, as a minimum, turnover must be presented on the face of the income statement (or statement of comprehensive income if presented).
5.9 An entity shall present additional line items, headings and subtotals in the statement of comprehensive income (and in the income statement, if presented), when such presentation is relevant to an understanding of the entity’s financial performance.
5.4.2 OmniPro comment
5.4.2.1 Overview
The single statement approach shows the profit and loss and other comprehensive together as one document which is referred to as the statement of comprehensive income. This compares to the two statement approach which shows them as two documents.
Other comprehensive income relates to items of income and expenses that are not recognised in the profit and loss as required or permitted by FRS 102.
5.4.2.2 The formats
5.4.2.2.1 Profit and loss account/income statement
The references at Section 5.5. of FRS 102 are to the UK Companies Act. The relevant references to the Irish Companies Acts with regard to the profit and loss layout are:
Format 1 Profit and loss format – Schedule 3 of Companies Act 2014 (see extract for this format at 5.11.2.2.2.)
Format 2 Profit and loss format – Schedule 3 of Companies Act 2014 (see extract for this format at 5.11.2.3.2)
The relevant references to Irish Companies Acts with regard to the consolidated balance sheet (i.e. consolidated statement)) are:
Format 1 Profit and loss format – Schedule 4 of Companies Act 2014 (see extract for this format at 5.4.2.3)
Format 2 Profit and loss format – Schedule 4 of Companies Act 2014
Additional line items, headings or subtotals can be added to the profit and loss/income statement if it is relevant to the understanding and is stated in Section 5.9 of FRS 102. Turnover/revenue must be shown on the face of the profit and loss account/income statement as stated in Section 5.7D of FRS 102. Section 5.6 of FRS 102 requires a split of the profit and loss to be shown between amounts attributable to controlling interests and non-controlling interests.
It is evident from the above that the income statement can be called a profit and loss account or statement of comprehensive income. The profit and loss should follow the layout of the Companies Act or can be laid out in the format in Section 5.5B and Section 5.5C of FRS 102 as long as the layout follows the substance of Part 1 general rules and formats schedules 1 to 3 of Companies Act 2006 for UK entities and of schedule 3 in Companies Act 2014 ROI entities. Section 5.5B and 5.5C of FRS 102 relates to a different choice as to what format the profit and loss account income statement/statement of comprehensive income can be presented in. UK companies can currently use this layout if they wish, providing they have then adopted the amendments made to FRS 102 in September 2015. Section 5.5B and Section 5.5C of FRS 102 have been discussed in the section titled ‘Alternative profit and loss format as set out in example 4 at 5.6.2.2.
5.4.2.2.2 Other comprehensive income
The other comprehensive income is FRS language and not dealt within company law Section 5.5A of FRS 102 requires an other comprehensive income (OCI). That section requires disclosure of the transactions recognised through OCI to be shown net of tax or alternatively they can be shown gross and the tax affect shown separately. They must be split out be nature. If consolidated accounts are being prepared then; the share of the associate or joint venture in relation to the OCI must be shown separately See example of an OCI at 5.4.2.2 for a group and 5.4.2.2.1 for a single entity.
5.4.2.3 Practical application of format 1 showing the single statement approach for group.
Example 1: Example of Single statement approach for a Group
| Consolidated Statement of Comprehensive Income | |||
| For the year ended 31 December 2015 | |||
| Notes | 2015 | 2014 | |
| CU | CU | ||
| Turnover | 1 | XXXXX | XXXXX |
| Cost of sales | (XXXX)
|
(XXXX)
|
|
| Gross profit | XXXX | XXXX | |
| Selling and distribution costs | (XXX) | (XXX) | |
| Administrative expenses | (XXX) | (XXX) | |
| Other operating income | XXX
|
XXX
|
|
| Group operating profit | 3 | XXX | XXX |
| Share of profit in associates | 4 | XXX | XXX |
| Share of profit in joint venture | 5 | XXX | XXX |
| Profit before interest and taxation | XXXX | XXXX | |
| Interest receivable and similar expenses | 6 | XXX | XXX |
| Interest payable and similar charges | 7 | (XXX)
|
(XXX)
|
| Profit before taxation | XXXX | XXXX | |
| Tax on profit | 8 | (XXX)
|
(XXX)
|
| Profit for the financial year |
– |
1,000,00 | 500,000 |
Other comprehensive income:
| Exchange differences on retranslation of foreign operations | XXX | XXX |
| Group cash flow hedges | ||
| -effective portion of changes in fair value to cash flow hedges | 9 XXX | XXX |
| -fair value of cash flow hedges transferred to income statement | 10 XXX | XXX |
| Actuarial loss in respect of the defined pension scheme | 11 (XXX) | (XXX) |
| Gain/(loss) on revaluation of intangible assets | 12 XXX | (XXX) |
| Gain/(loss) on revaluation of property, plant and equipment | 13 XXX | (XXX) |
| Gain/(loss) on revaluation of subsidiaries, associates, etc. | 14 XXX | (XXX) |
| Deferred tax on components of other comprehensive income | 15 XXX | XXX |
| Total other comprehensive income for the year net of tax |
200,000 |
(100,000) |
| Total comprehensive income for the year |
1,200,000 |
400,000 |
| Total comprehensive income for the financial year attributable to:
Non-controlling interests |
XXXX |
XXXX |
| Owners of the parent company |
XXX
|
XXX
|
|
1,200,000 |
400,000 |
|
| Profit for the financial year attributable to:
Non-controlling interests |
XXXX |
XXXX |
| Owners of the parent company |
XXX
|
XXX
|
|
1,000,000 |
500,000 |
Note: The Companies (Accounting) Act 2017 took out the words “on ordinary activities” in the profit and loss account and therefore for all periods beginning on or after 1 January 2017, it is no longer permitted. The words “interest payable and similar charges’ was also replaced with ‘interest payable and similar expenses.”
5.4.2.3.1 Practical application of single statement approach for an individual entity.
Example 2: Example of Single statement approach for an individual entity (i.e. not group accounts)
| Statement of Comprehensive Income | |||
| For the year ended 31 December 2015 | |||
| Notes | 2015 | 2014 | |
| CU | CU | ||
| Turnover | 1 | XXXXX | XXXXX |
| Cost of sales | (XXXX)
|
(XXXX)
|
|
| Gross profit | 2 | XXXX | XXXX |
| Selling and distribution costs | (XXX) | (XXX) | |
| Administrative expenses | (XXX) | (XXX) | |
| Other operating income | XXX
|
XXX
|
|
| Operating profit | 3 | XXX | XXX |
| Income from shares in group undertakings | 4 | XXX | XXX |
| Income from shares in other financial assets | 4 | XXX | XXX |
| Income from shares in participating interests | 5 | XXX | XXX |
| Profit before interest and taxation | XXXX | XXXX | |
| Interest receivable and similar income | 6 | XXX | XXX |
| Interest payable and similar expenses | 7 | (XXX)
|
(XXX)
|
| Profit on before taxation | XXXX | XXXX | |
| Tax on profit | 8 | (XXX)
|
(XXX)
|
| Profit for the financial year | 1,000,00 | 500,000 |
Other comprehensive income:
| cash flow hedges | ||
| – effective portion of changes in fair value to cash flow hedges | 9 XXX | XXX |
| – fair value of cash flow hedges transferred to income statement | 10 XXX | XXX |
| Actuarial loss in respect of the defined pension scheme | 11 (XXX) | (XXX) |
| Gain/(loss) on revaluation of intangible assets | 12 XXX | (XXX) |
| Gain/(loss) on revaluation of property, plant and equipment | 13 XXX | (XXX) |
| Gain/(loss) on revaluation of subsidiaries, associates, etc. | 14 XXX | (XXX) |
| Deferred tax on components of other comprehensive income | 15 XXX | XXX |
| Total other comprehensive income for the year net of tax |
200,000 |
(100,000) |
| Total comprehensive income for the year |
1,200,000 |
400,000 |
| Total comprehensive income for the financial year attributable to: | ||
| Owners of the parent company | 1,200,000
|
400,000
|
| 1,200,000 | 400,000 | |
| Profit for the financial year attributable to: | ||
| Owners of the parent company | 1,000,000
|
400,000
|
| 1,000,000 | 500,000 | |
| Note: The Companies (Accounting) Act 2017 took out the words “on ordinary activities” in the profit and loss account and therefore for all periods begining on or after 1 January 2017 it is no longer permitted. The words “interest payable and similar charges’ was replaced with ‘interest payable and similar expenses.” | ||
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Example 1: Example of Single statement approach for a Group.
Example 2: Example of Single statement approach for an individual entity (i.e. not group accounts).
Example 3: Two statement approach for a Group.
Example 3(a): Two statement approach for an individual entity (i.e. not group accounts).
Example 4: Consolidated Statement of Comprehensive/Income statement approach – Alternative Approach.
Example 5: Discontinued operations not ceased.
Example 6: Exceptional item disclosure note for an accounting policy.
Example 7: See below the extract from format 1 of the Companies Act 2006 for the UK.
Example 8 See below the extract from format 1 of the Companies Act 2014 for the Republic of Ireland.
Example 9 See below the extract from format 2 of the Companies Act 2014 for the Republic of Ireland.
Example 10: See below the extract from format 2 of the Companies Act 2006 for the UK.
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