Venus Cellular

1843 WordsApr 22, 20138 Pages
MODULE 10 CASE SOLUTION CRITIQUE Venus Cellular COMPREHENSIVE INCOME Question 1: Identify whether the analysis of expenses in profit or loss is presented by nature or function. In accordance with IFRS, presentation of financial information in the statement of profit or loss requires that expenses be classified based on either their nature or function within the operation. IAS 1.99 states that “an entity shall present an analysis of expenses recognized in profit or loss using a classification based on either their nature or their function within the entity, whichever provides information that is reliable and more relevant.” IAS 1.101 further explains, “expenses are sub classified to highlight components of financial…show more content…
GAAP, but are provided here to give the statement users a more precise understanding of the financial position of the entity. The Venus Cellular statement of comprehensive income includes several additional line items in order to provide improved clarity in relation to the operating performance of the entity. IAS 1.86 explains, “the effects of an entity’s various activities, transactions and other events differ in frequency, potential for gain or loss and predictability, disclosing the components of financial performance assists users in understanding the financial performance achieved and in making projections of future financial performance. An entity includes additional line items in the statement(s) presenting profit or loss and other comprehensive income and it amends the descriptions used and the ordering of items when this is necessary to explain the elements of financial performance.” Additionally, the implementation guidance provided in IAS 1 BC56 states, “The Board recognizes that an entity may elect to disclose the results of operating activities, or a similar line item, even though this term is not defined. In such cases, the Board notes that the entity should ensure that the amount disclosed is representative of activities that would normally be regarded as ‘operating’. In the Board’s view, it would be misleading and would impair the comparability of financial statements if items of an operating
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