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ACCA Applied Knowledge · Financial Accounting · Statement of profit or loss and other comprehensive income

Under IAS 1, which of the following items must be presented in other comprehensive income rather than in profit or loss for the year?

A revaluation surplus on property, plant and equipment is presented in other comprehensive income, not profit or loss. Disposal losses, depreciation and loan interest are ordinary expenses that go through profit or loss, so only the revaluation surplus belongs in OCI.

  1. ARevaluation surplus arising on a property, plant and equipment assetCorrect
  2. BLoss on disposal of a machine
  3. CDepreciation of a building
  4. DInterest paid on a bank loan

Explanation

A revaluation surplus on property, plant and equipment is recognised in other comprehensive income and accumulated in equity. A loss on disposal, depreciation and loan interest are all expenses recognised in profit or loss. The distractors are routine income statement items.

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