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sir i can’t stress enough on this, but SBR seems to have made a joke out ‘profits’ or ‘earnings’ recorded in SPL! absolute joke! why are unrealised gains and losses whether it be on outstanding monetary assets(when translated into functional currency from a non-functional currency) or derivatives( for instance if a co. has share options and is intending and eventually does buy shares using share options, then why are any gains on FV of premium recorded in SPL???). And ok you may say that the company is at the start unsure whether it will exercise the options or sell the options(pocketing any upwards FV of premium) then at least the company should take those gains arising from upwards premium valuation out of SPL if it eventually exercises the option, and doesn’t benefit in any way from movements in vale of premium!!!
honestly sir, i no longer believe that SPL shows a co’s ‘realised gains/(losses)’!!! I would rather just stick to the rest of the half of definition of SPL profit figure i.e. ‘trading/operating’ income and expenses.
I don’t think it shows realised profits and I don’t think it ever has.
That’s down to the lawyers who then take P&L profits and convert them into distributable profits (‘realised’)
Blame the standard writers not SBR!
Exam relevance – what should really be in P&L and what should be in OCI – but only for 6 marks…………..
sir if you are saying that SPL never shows realised gains/losses then what will be the difference between SPL and OCI?? what makes OCI different from SPL is that the former shows unrealised gains/(losses) while the latter shows realised gains/losses, except for the few exceptions that i could think of
You need to remember that this exam is no longer about theoretical discussions. We used to have to answer a big discussion question but it just does not happen now.
Some items in the profit and loss are realised and some are unrealised.
For exam purposes all that matters is that you have read the examiner articles on the difference between profit and loss and other comprehensive income.
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