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

Which of the following items would be shown as a deduction in arriving at profit for the year in a statement of profit or loss, rather than as an item of other comprehensive income?

Income tax expense on the year's profit is deducted in arriving at profit for the year. Revaluation gains are other comprehensive income, while dividends paid and share premiums are equity transactions shown in the statement of changes in equity.

  1. AIncome tax expense on the year's profitCorrect
  2. BGain on revaluation of a building
  3. CDividends paid to ordinary shareholders
  4. DIssue of shares at a premium

Explanation

Income tax expense on profit is charged in arriving at profit for the year. A revaluation gain is OCI, while dividends paid and share premium are movements in equity shown in the statement of changes in equity, not in the statement of profit or loss.

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