(ii) Discuss whether gains and losses that have been reported initially in one section of
(ii) Discuss whether gains and losses that have been reported initially in one section of the performance
statement should be ‘recycled’ in a later period in another section and whether only ‘realised’ gains and
losses should be included in such a statement. (9 marks)
(ii) Recycling is an issue for both the current performance statements and the single statement. Recycling occurs where an
item of financial performance is reported in more than one accounting period because the nature of the item has in some
way changed. It raises the question as to whether gains and losses originally reported in one section of the statement
should be reported in another section at a later date. An example would be gains/losses on the retranslation of the net
investment in an overseas subsidiary. These gains could be reported annually on the retranslation of the subsidiary and
then again when the subsidiary was sold.
The main arguments for recycling to take place are as follows:
1. when unrealised items become realised they should be shown again
2. when uncertain measurements become certain they should be reported again
3. all items should be shown in operating or financing activities at some point in time as all items of performance are
ultimately part of operating or financing activities of an entity.
There is no conceptual justification for recycling. Once an item has been recognised in a statement of financial
performance it should not be recognised again in a future period in a different part of that statement. Once an item is
recognised in the statement there is an assumption that it can be reliably measured and therefore it should be recognised
in the appropriate section of the statement with no reason to show it again.
Gains and losses should not be based on the notion of realisation. Realisation may have been a critical event historically
but given the current financial exposures of many entities, such a principle has limited value. A realised gain reflects the
same economic gain as an unrealised gain. Items should be classified in the performance statement on the basis of
characteristics which are more useful than realisation. The effect of realisation is explained better in the cash flow
statement. Realisation means different things in different countries. In Europe and Asia it refers to the amount of
distributable profits but in the USA it refers to capital maintenance. The amount of distributable profits is not an
accounting but a legal issue, and therefore realisation should not be the overriding determinant of the reporting of gains
and losses.
An alternative view could be that an unrealised gain is more subjective than a realised gain. In many countries, realised
gains are recognised for distribution purposes because of their certainty because this gives more economic stability to
the payment of dividends.
翻译一点点英语初中水平即可语句通顺In this year"s yearbook,they are 英语 2020-05-14 …
暗黑破坏神2玩不了,出来一串英文diablo II was unable to detect a 其他 2020-05-14 …
如何翻译宠辱不惊,闲看庭前花开花落.去留无意,漫随天外云卷云舒答案1:Is indifferent 英语 2020-05-17 …
II.改变主动语态变成被动语态1.We can finish the work in two da 英语 2020-05-17 …
(ii) Discuss whether gains and losses that have be 财会类考试 2020-05-21 …
(ii) Explain the income tax (IT), national insuran 财会类考试 2020-05-21 …
(ii) Advise Clifford of the capital gains tax impl 财会类考试 2020-05-21 …
(b) Prepare a reasoned explanation of how any capi 财会类考试 2020-05-21 …
哪些单词中有in和ii?是中间!答得好我加财富悬赏!ii的前面要有2个字母,后面2个字母;in要8 英语 2020-06-15 …
名词“收获”gains的搭配动词是?就是说“我取得了许多收获”怎么说?我指的“名词收获”就是“ga 语文 2020-07-20 …