Outturn and Primary statements: Difference between pages

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''Financial reporting''.


'Outturn' market rates are the rates or prices which actually occur in the relevant market - in other words the rates which 'turn out' to be the case in the market.  
In financial reporting, primary statements are the main accounting statements required to be presented.  


Outturn market rates may be compared with, for example, forecast rates, expected rates, or hedged rates.


For example if hedging a borrowing with an interest rate option with a strike price of 6%.
These normally include statements of:


At an outturn market rate of 8% the borrower's option would be exercised (and pay out to the holder assuming it was cash-settled).  
* Financial position (balance sheet).
* Comprehensive income (profit or loss).
* Changes in equity.
* Cash flows.


At an outturn market rate of 5% the borrower's option would lapse worthless.


Outturn rates in this sense are related to - but different from - the all-in hedged rates achieved.  
The primary statements are supported by ''notes'' providing additional and more detailed financial information.


The ''hedged rate achieved'' means the total income or expense resulting, taking account both of the underlying exposure and of the hedging instrument.


So continuing the same example, and assuming an option premium paid of 0.5%.
The names of the primary financial statements are not normally mandatory, and they also differ according the accounting regime under which an entity is reporting.


::i. At an outturn rate of 5%, the hedged rate borrowing achieved = 5% market rate + 0.5% option premium = 5.5%.


::ii. At an outturn rate of 8%, the hedged borrowing rate achieved = 6% option strike price + 0.5% option premium = 6.5%.
====Comprehensive income and profit or loss====


Comprehensive income includes both:


2.
*Profit or loss for the period; and


The result or the net result of any activity.
*Other comprehensive income for the period.




3.  
Many entities report their profit or loss and other comprehensive income in two separate statements.
 
In these cases, there are FIVE primary financial statements: cash flows, changes in equity, comprehensive income, financial position, and profit or loss.
 
 
The statement of profit or loss is also known as the ''income statement''.


The all-in hedged rate or outcome achieved, as a result of hedging activities.




== See also ==
== See also ==
* [[Expectations theory]]
* [[Entity]]
* [[Hedging]]
* [[FVTOCI]]
* [[FVTPL]]
* [[IAS 1]]
* [[Income statement]]
* [[International Accounting Standards]]
* [[Notes]]
* [[Primary financial statements]] (IAS)
* [[Statement of cash flows]]
* [[Statement of changes in equity]]
* [[Statement of comprehensive income]]
* [[Statement of financial position]]
* [[Statement of profit or loss and other comprehensive income]]
 
[[Category:Accounting,_tax_and_regulation]]

Revision as of 11:00, 29 October 2020

Financial reporting.

In financial reporting, primary statements are the main accounting statements required to be presented.


These normally include statements of:

  • Financial position (balance sheet).
  • Comprehensive income (profit or loss).
  • Changes in equity.
  • Cash flows.


The primary statements are supported by notes providing additional and more detailed financial information.


The names of the primary financial statements are not normally mandatory, and they also differ according the accounting regime under which an entity is reporting.


Comprehensive income and profit or loss

Comprehensive income includes both:

  • Profit or loss for the period; and
  • Other comprehensive income for the period.


Many entities report their profit or loss and other comprehensive income in two separate statements.

In these cases, there are FIVE primary financial statements: cash flows, changes in equity, comprehensive income, financial position, and profit or loss.


The statement of profit or loss is also known as the income statement.


See also

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