In the One Statement Approach, which components are presented in a single financial statement?

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Multiple Choice

In the One Statement Approach, which components are presented in a single financial statement?

In the One Statement Approach, you present both the items that affect profit or loss and the items that go into other comprehensive income in one single financial statement—the statement of profit or loss and other comprehensive income. This means you show revenue and expenses to reach net profit, then include the OCI components so you can display total comprehensive income for the period in one place. The idea is to provide a complete view of how the entity’s equity changed during the period from all sources, not just operating performance. If you only showed profit or loss, you’d miss the OCI effects; if you only showed OCI, you’d omit the essential profit or loss portion. Balance sheet items belong on the balance sheet, not in this single statement.

In the One Statement Approach, you present both the items that affect profit or loss and the items that go into other comprehensive income in one single financial statement—the statement of profit or loss and other comprehensive income. This means you show revenue and expenses to reach net profit, then include the OCI components so you can display total comprehensive income for the period in one place. The idea is to provide a complete view of how the entity’s equity changed during the period from all sources, not just operating performance.

If you only showed profit or loss, you’d miss the OCI effects; if you only showed OCI, you’d omit the essential profit or loss portion. Balance sheet items belong on the balance sheet, not in this single statement.

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