Note 3 – Statement of profit or loss and other comprehensive income
I’ve been reviewing the statement of profit or loss and other comprehensive income and it appears to be in two sections.

The first section appears to be entitled ‘profit or loss’ and the second ‘other comprehensive income’. It appears that the tax charge is included in the ‘profit or loss’ section of the statement as there is no tax charge included in the ‘other comprehensive income’ section of the statement. I have a number of questions regarding this statement:

– How do we decide where to put a particular item of income or expenditure?
– Where does the tax relating to ‘other comprehensive income’ get shown?
– Do the above points have an impact on the computation of performance evaluation indicators which will be of interest to shareholders? (6 marks)

Required:
Provide answers to the questions raised by the director in notes 1–3. You should justify your answers with reference to relevant International Financial Reporting Standards.

Note: The mark allocation is shown against each of the three notes above.