Accounting Business Reporting for Decision Making

242 Accounting: Business Reporting for Decision Making

other than profit or loss in the statement of profit or loss and those resulting from transactions with

owners as owners (such as dividends and capital contributions). Entities can elect to present all items

of income and expense in a reporting period in a single statement of comprehensive income or in two

statements, namely (1) a statement of profit or loss showing the income and expenses associated with

the determination of profit (or loss) for the reporting period and (2) a statement beginning with profit or

loss and displaying components of other comprehensive income (statement of comprehensive income).

In its 2015 financial report, JB Hi-Fi Ltd has elected to present a statement of profit or loss showing the

profit or loss for the reporting period and a statement of comprehensive income beginning with profit

or loss and displaying components of other comprehensive income. Figure 6.7 shows the statement of

comprehensive income from the 2015 financial report of JB Hi-Fi Ltd.

JB Hi-Fi Ltd

Statement of comprehensive income

for the financial year ended 30 June 2015

Consolidated

2015

$’000

2014

$’000

Profit for the year

Other comprehensive income

Changes in the fair value of cash flow hedges (net of tax)

Exchange differences on translation of foreign operations

136 511

1

(2 509)

128 447

576

4 728

Other comprehensive income for the year (net of tax) (2 508) 5 304

Total comprehensive income for the year 134 003 133 751

Total comprehensive income attributable to:

Owners of the company

Non-controlling interests

134 003

—

133 663

88

134 003 133 751

FIGURE 6.7 JB Hi-Fi Ltd Statement of comprehensive income for the financial year ended 30 June 2015

Source: JB Hi-Fi Ltd 2015, preliminary final report, p. 57.

The statement of changes in equity

When assessing the change in an entity’s financial position, in addition to users being informed of the

profit or loss for the reporting period, users should also be able to identify the change in equity from the

start to the end of the reporting period and the reasons for the change. For example, if Advantage Tennis

Coaching (ATC) earned a profit of $45 000 for the 3 month period 1 October 2016 to 31 December 2016

and Nicholas Cash, the owner, withdrew $30 000 during that period, the change in equity would be an

increase of $15 000. Equity at the end of 2016 would be $51 370 comprising equity at 30 September

2016 ($36 370) plus the increase in equity ($15 000). Figure 6.8 shows the statement of changes in

equity for ATC, a sole trader, for the year ended 31 December 2016.

Advantage Tennis Coaching

Statement of changes in equity

for the year ended 31 December 2016

Capital, Nicholas Cash, as at 1 October 2016

Plus: Profit for three months

Less: Drawings

$36 370

45 000

30 000

Capital, Nicholas Cash, as at 31 December 2016 $51 370

FIGURE 6.8 ATC statement of changes in equity for 3 months ended 31 December 2016