Automated Data Entry into Tally, Zoho Books, Quickbooks Certificate in Quantitative Finance


Prior to Ind AS, unrealized gain or loss on few capital incomes which were used to flow through shareholders equity and to reserves and surplus.This used to show incorrect picture to the investors and other stake holders.

Especially when company management does not have control over gain or loss made due to these transactions

It was noticed that Bank of America posted profit of US $ 1.4 billion when whole world was facing financial crisis in the FY 2007-09. When comprehensive income statement for the same period of Bank of America was prepared separately than it was noticed that Bank of America had incurred loss of US $ 3.4 billion.

To provide exact profitability and bring more transparency to the financial statements of a company, the concept of Other Comprehensive Income was introduced in IND AS.

Other Compressive Income in IND AS

Other compressive Income

There are very few capital income/expenses that are posted under the head - Other Compressive Income. Following are a few expenses:

1. Unrealized gain/loss booked on the Investment

For. E.g. If company bought shares at Rs. 10,00,000/- on 1st October,2019 and fair value for the same were Rs. 11,00,000/- as on 31st March,2020, then Rs. 1 Lakh will be booked under Other comprehensive income as gain on investment.Investment for Available for sale or held for trading (immediate purchase and sold investment-short term) than this needs to account far at fair value. Difference will be presented in OCI only in investments which are  available for sale and sale or held for trading will be presented in the statement of Profit & Loss a/c.

2. Gain/loss on actuarial valuation

Accounts team book gratuity provision based on the calculations provided by the There are chances that actual liability payable to the employee and the amount provided in the book of accounts are different than in such cases gain/loss incurred in this transaction will be part of OCI.

3. Gain/loss on foreign translation reserves

There are situations where has entered contract with foreign vendor where company is required to pay USD 1000 on 30th April,2020. When company booked entry on 1st February,2020 @ Rs. 50 but rate of US $ as on 31st March,2020 was Rs. 51 than company will not go to statement of P&L but need to show gain of 1,000/- under other comprehensive income bucket.


4. Unrealized Gain/loss on cash hedge

Company enters hedging contract with bank@ Rs. 51. If company purchased good @rate of Rs. 52 on 1st January,2020 and then Rs. 1 (51-50) will be gain on account due to cash flow hedge.

In crude language we termed it as notional profit/loss on the balance sheet date.


5. Translations difference in non-integral foreign operations

When Foreign associates/ branches of the company are dependent on the company on the investment made by company into foreign associates or branches but foreign associates or foreign branches are independently managing its business on its own than it is termed as non-integral foreign operations. translation difference means when company converts currency in reporting currency than difference is called translation difference than in the above case debit of one entity and credit of another difference is called translation difference.

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Published by

Aniruddha Deshpande
(Finance Professional)
Category Accounts   Report

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