Reclassification adjustment
The applicable standard determines whether and when a previously recognised OCI amount is reclassified, often called recycling. Present the required information about reclassification adjustments so amounts are not counted twice in total comprehensive income. Some OCI items, such as gains on equity instruments irrevocably elected at FVOCI under IFRS 9, are not reclassified to profit or loss on disposal. A change in a balance-sheet line item is not automatically an OCI reclassification adjustment.
Worked example
A qualifying foreign-operation translation reserve of $20,000 is reclassified from OCI to profit or loss on disposal under IAS 21. The presentation includes the corresponding reclassification adjustment, subject to the standard’s requirements.
Common mistake
Calling every correction of a classification error a reclassification adjustment, or recycling an IFRS 9 elected FVOCI equity gain to profit or loss.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |