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STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF COMPREHENSIVE INCOME. (Income Statement) Revenue Cost of Sales Gross Profit Other Income Unusual Amounts Operating Profit Interest / Finance costs Taxation Net Profit Other Comprehensive Income. REVENUE RECOGNITION. REVENUE INCLUDES : Sale of goods rendering of services

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STATEMENT OF COMPREHENSIVE INCOME

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  1. STATEMENT OF COMPREHENSIVE INCOME (Income Statement) • Revenue • Cost of Sales • Gross Profit • Other Income • Unusual Amounts • Operating Profit • Interest / Finance costs • Taxation • Net Profit • Other Comprehensive Income Statement of Comprehensive Income

  2. Statement of Comprehensive Income

  3. Statement of Comprehensive Income

  4. REVENUE RECOGNITION • REVENUE INCLUDES: • Sale of goods • rendering of services • use of assets by others which yield : • interest • royalties • dividends • MEASUREMENT • fair value of the consideration at transaction date Statement of Comprehensive Income

  5. REVENUE RECOGNITION • GOODS • transfer of significant rewards of ownership • no managerial involvement or control • reliably measured • probable that economic benefits will flow • costs can be measured Statement of Comprehensive Income

  6. REVENUE RECOGNITION • SERVICES Outcome can be estimated • % completion Outcome unknown but Revenue >Costs • recognise revenue to extent of costs Outcome not known • expense costs when incurred • recognise revenue when received Statement of Comprehensive Income

  7. LEISURENET LTD 1999 Statement of Comprehensive Income

  8. Statement of Comprehensive Income

  9. COMPREHENSIVE INCOME • Profit/ Comprehensive income / Other comprehensive income • Approx 5 items in OCI • Extraordinary items – no longer allowed • Exceptional / Abnormal items are not defined • Profit from operations / EBITDA Statement of Comprehensive Income

  10. GRINDROD 2009 Statement of Comprehensive Income

  11. Statement of Comprehensive Income

  12. EARNINGS PER SHARE • Earnings / number of shares in issue • Too heavily relied upon in SA??? • Adjustments made to both earnings and number of shares • Diluted EPS • Earnings and number of shares in issue adjusted for effects of all dilutive potential ordinary shares • Financial instruments convertible into ordinary shares (e.g. convertible debentures) • Future share issues at below fair value (e.g. options) Statement of Comprehensive Income

  13. HEADLINE EARNINGS PER SHARE • EPS not a good basis to predict future profits • Used by JSE for PE’s etc • Not sustainable or maintainable earnings • Headline earnings exclude all items of a capital nature • Include • all trading profits/losses • Exclude • profit/loss on discontinued items • profit/loss on fixed assets/investments • goodwill write-offs • Must be robust & factual • Reconciliation of EPS to HEPS Statement of Comprehensive Income

  14. Statement of Comprehensive Income

  15. REUNERT 2007 INTERIMS Statement of Comprehensive Income

  16. REUNERT 2007 INTERIMS Statement of Comprehensive Income

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