03-11-2010, 06:32 AM
Dears
In fact SOCI reflects changes in equity that are not the owners changes; yet it is more of a subordinate statement and we can argue whether it is a sub-part of SOCE or income statement because it falls between the two.
Since SOCI was entirely not in question while SRO 45 was issued, some people have difference of opinion on this. It does not mean they are not aware of this issue; rather, I believe in majority of cases they differ in opinion.
A similar difference was observed regarding FAIR VALUE RESERVE against available for sale investment; after adoption of SOCI that whether it is now to be treated as "capital reserve" or "revenue reserve".
Another issue is regarding a new componenet of the "complete set of financial statements" as defined in paragraph 10 (f) of revised IAS-1. This component requires publishing an additional balance sheet of the earliest period presented when a policy is changed or any other retrospective change is made eg prior period error etc. People do differ in opinion regarding how suchbalance sheet should be published. Some wished to include it in notes; but this idea was rejected because it is a componenet of financials and is not a part of notes. Some wished to prepare altogether two balance sheets in such a case; one of current year with last year as comparative (closing dates); and the other of the date that is earliest reported date.
However, latest illustrative financial statements prepared by world's most renowned international firms, in such cases of retrospective application, have suggested to prepare three columner balance sheet; current, comparative and earlest. All related notes will also show three columns and three dates' figures.
These all are different viewpoints and such differences will reduce over a shorter period of time, I guess.
However, I firnly believe that in the light of SRO 45, incremental depreciation on revaluation surplus should not be routed through SOCI and must directly be taken to SOCE.
Regards,
Kamran.
In fact SOCI reflects changes in equity that are not the owners changes; yet it is more of a subordinate statement and we can argue whether it is a sub-part of SOCE or income statement because it falls between the two.
Since SOCI was entirely not in question while SRO 45 was issued, some people have difference of opinion on this. It does not mean they are not aware of this issue; rather, I believe in majority of cases they differ in opinion.
A similar difference was observed regarding FAIR VALUE RESERVE against available for sale investment; after adoption of SOCI that whether it is now to be treated as "capital reserve" or "revenue reserve".
Another issue is regarding a new componenet of the "complete set of financial statements" as defined in paragraph 10 (f) of revised IAS-1. This component requires publishing an additional balance sheet of the earliest period presented when a policy is changed or any other retrospective change is made eg prior period error etc. People do differ in opinion regarding how suchbalance sheet should be published. Some wished to include it in notes; but this idea was rejected because it is a componenet of financials and is not a part of notes. Some wished to prepare altogether two balance sheets in such a case; one of current year with last year as comparative (closing dates); and the other of the date that is earliest reported date.
However, latest illustrative financial statements prepared by world's most renowned international firms, in such cases of retrospective application, have suggested to prepare three columner balance sheet; current, comparative and earlest. All related notes will also show three columns and three dates' figures.
These all are different viewpoints and such differences will reduce over a shorter period of time, I guess.
However, I firnly believe that in the light of SRO 45, incremental depreciation on revaluation surplus should not be routed through SOCI and must directly be taken to SOCE.
Regards,
Kamran.