Question

1. What are the six key items to be reported on the statement of net income...

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.

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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.

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