Question

1. What are the six key items to be reported on the statement of net income under IFRS? Must a company report operating income under IFRS?

2. Are companies reporting under U.S. GAAP required to prepare a statement of stockholders’ equity? Explain.

Answer 1

1. IFRS requires 6 key items to be reported on the statement of net income :

• Revenue
• Finance costs
• Share of income/loss of associates
• Tax expense
• After - tax profit or loss on discontinued operations, and
• Net income, also called profit or loss

A company is allowed to report operating income, but is not required to present it.

2. Although U.S. GAAP does not require a statement of stockholders' equity, it is required by SEC. Thus, U.S. non-public companies are not required to provide the statement of stockholders' equity with their financial statements. However, most non-public companies do include a statement of stockholders' equity on a voluntary basis.