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AS-5
NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND
CHANGES IN ACCOUNTING POLICIES
Objective: The
objective of this standard is to prescribe the classification
and disclosure of certain items in the statement of profit and
loss so that all enterprises prepare and present such a
statement on a uniform basis. This enhances the comparability of
the financial statements of an enterprise over time and with the
financial statements of other enterprises.
Scope:
This Standard applied to an enterprise in presenting
profit or loss from ordinary activities, extraordinary items and
prior period items in the statement of profit and loss, in
accounting for changes in accounting estimates, and in
disclosure of changes in accounting policies.
It does not deal with the
tax implications of
extraordinary items, prior period items, changes in accounting
estimates, and changes in accounting policies for which
appropriate adjustments will have to be made depending upon the
circumstances.
Definitions:
A.
Ordinary activities:
These are any activities and other incidental
activities which are undertaken by an enterprise as part of its
business.
Disclosure requirements:
Extraordinary items:
The nature and the
amount of
each extraordinary item
should be separately disclosed in the statement of profit and
loss in a manner that its
impact on current profit or
loss can be perceived.
Ordinary items:
When items of income and expense from ordinary activities are of
such size,
nature or
incidence that their
disclosure is relevant to explain the performance of the
enterprise for the period, the
nature and amount
of such items should be disclosed separately Prior
period items: The
nature and amount of prior period items should be separately
disclosed in the profit and loss statement in such a way that
their impact
on the
current
profit or loss can be
perceived.
Accounting estimates:
The nature and amount of a change in an accounting estimate
which has a material effect in the current period or which is
expected to have a material effect in subsequent periods should
be disclosed. If the effect cannot be quantified, this fact
should be disclosed.
Accounting policies:
The effect of any change in an accounting policy, if material,
should be disclosed in the financial statements of the
period quantifying the impact. Where the effect cannot be
quantified, wholly or in part, the fact should be disclosed. |
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