WEEK 8
Statement of Comprehensive Income
By the end of this week, you should be able to:
Differentiate between different SOCI layouts, classifications and approach
Understand what the SOCI aims to depict
Explain why revenue is so important, and how it is recognised and measured
Identify drivers of revenue growth, and if they are nominal or real
Differentiate between revenue and other income for various businesses
Understand the relationship with cost of sales, gross profit, margins, and its
importance
Understand why separate disclosure is required for some line items
Explain the importance of the finance cost and tax expense line item, their
composition and disclosure
Understand why EPS, HEPS, and DEPS are shown on the face of the SOCI
What is SOCI
• An important statement that ‘tells a story’ Of what happened in the year ended…
• All tells the same story
• Information for analysis, comparison, and decision-making at a high-level
Presentation of the SOCI
• One or two statement
• Still tells the same story
• One statement: shows profit and then immediately OCI, and TCI
• Two statements: shows profit, and then a second statement for OCI
and TCI
• OCI: Other comprehensive Income
• TCI: Total comprehensive Income
, How to tell the differences
One Statement Approach Two Statement Approach
Starts with Revenue Starts with Revenue
Ends with Profit after tax
Starts again with Profit after tax
Ends with Total Comprehensive Income Ends with Total Comprehensive Income
One heading and often on a single page Separate headings and separate pages
(often)
Statement of Comprehensive Income
By the end of this week, you should be able to:
Differentiate between different SOCI layouts, classifications and approach
Understand what the SOCI aims to depict
Explain why revenue is so important, and how it is recognised and measured
Identify drivers of revenue growth, and if they are nominal or real
Differentiate between revenue and other income for various businesses
Understand the relationship with cost of sales, gross profit, margins, and its
importance
Understand why separate disclosure is required for some line items
Explain the importance of the finance cost and tax expense line item, their
composition and disclosure
Understand why EPS, HEPS, and DEPS are shown on the face of the SOCI
What is SOCI
• An important statement that ‘tells a story’ Of what happened in the year ended…
• All tells the same story
• Information for analysis, comparison, and decision-making at a high-level
Presentation of the SOCI
• One or two statement
• Still tells the same story
• One statement: shows profit and then immediately OCI, and TCI
• Two statements: shows profit, and then a second statement for OCI
and TCI
• OCI: Other comprehensive Income
• TCI: Total comprehensive Income
, How to tell the differences
One Statement Approach Two Statement Approach
Starts with Revenue Starts with Revenue
Ends with Profit after tax
Starts again with Profit after tax
Ends with Total Comprehensive Income Ends with Total Comprehensive Income
One heading and often on a single page Separate headings and separate pages
(often)
