What does the statement of other comprehensive income primarily show?

The statement of other comprehensive income primarily shows income and expenses that are not recognized in profit and loss for the period. This financial statement provides insights into certain financial activities that may affect the overall financial position of a company but are not included in the traditional net profit calculation.

For instance, items that typically fall into this category include unrealized gains and losses on financial instruments, foreign currency translation adjustments, and pension plan adjustments. These items reflect changes in the value of certain assets and liabilities that can impact a company’s equity but do not result in immediate cash flows or operational profits.

By separating these items from standard profit reporting, the statement of other comprehensive income allows stakeholders to see a broader view of how various economic factors may influence the net worth of the company without affecting the current profit figures directly. This helps in providing a clearer and more detailed understanding of a company’s financial health over time.