[Disclosure Checklist] AS 5 | Net Profit or Loss for the Period, Prior Period Items & Changes in Accounting Policies

The objective of AS 5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies, is to prescribe the classification and disclosure of certain items in the statement of profit and loss so that all enterprises prepare and present such a statement on a uniform basis. This enhances the comparability of the financial statements of an enterprise over time and with the financial statements of other enterprises. Accordingly, this Standard requires the classification and disclosure of extraordinary and prior period items, and the disclosure of certain items within profit or loss from ordinary activities. It also specifies the accounting treatment for changes in accounting estimates and the disclosures to be made in the financial statements regarding changes in accounting policies.

As per the requirement of this standard, an entity is required to follow the below-mentioned disclosure requirements:

I. Whether the entity has disclosed the following components on the face of the statement of profit and loss:

(a) Profit or loss from ordinary activities?

(b) Extraordinary items?

II. Check whether the entity:

(a) disclosed extraordinary items in the statement of profit and loss as part of net profit or loss for the period?

(b) separately disclosed the nature and amount of each extraordinary item in the statement of profit and loss in a manner that its impact on current profit or loss can be perceived?

III. When the items of income and expense from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, whether separate disclosure for the nature and amount of such items have been made?

IV. Has the entity disclosed the nature and amount of prior period items separately in the statement of profit and loss in a manner that their impact on the current profit or loss can be perceived?

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