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Term before 2007 revision of IAS 1 Term as amended by IAS 1 (2007)
1. recognised [directly] in equity (only for OCI components) > recognised in other comprehensive income
2. recognised [directly] in equity (for recognition both in OCI and equity) > recognised outside profit or loss (either in OCI or equity)
3. removed from equity and recognised in profit or loss (‘recycling’) > reclassified from equity to profit or loss as a reclassification adjustmentHello sir, I would like to ask the first and second one. What is the differences? and is there any example for it?
For the third one, is there any example?
Thanks
Hi,
You will see more of this as your progress beyond IAS 1 but it is essentially looking at where gains/losses are recognised in the financial statements.
1 and 2 are very similar and are looking at gains on property revaluations and gains on FVTOCI financial assets. They are not shown through profit or loss but in other comprehensive income.
3 is when we have recognised a gain in OCI previously in one period and now the gain has been realised and it is then recycled through profit or loss. An example being FX differences on foreign subsidiaries (off syllabus, so don’t worry).
Thanks
Ok Sir, May I know is there any absolute difference between 1 & 2?
because it seems like there is a reason behind since IAS 1 shows this two terms as separately.
Thanks Sir
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