Last Updated on 26/03/2021 by 75385885
With recycling/without recycling – With recycling is the process where gains or losses for equity instruments are reclassified from equity to profit or loss as an accounting adjustment. In other words gains or losses for equity instruments are first recognised in the other comprehensive income and then in a later accounting period also recognised in the profit or loss.
In this way the gain or loss for equity instruments is reported in the total comprehensive income of two accounting periods and in colloquial terms is said to be recycled as it is recognised twice.
With recycling/without recycling – Without recycling is the process that gains and losses for equity instruments (including any related foreign exchange gains and losses) on these instruments are recognised in other comprehensive income and not profit or loss. Dividends that represent a return on investment for equity instruments (as opposed to a return of investment) continue to be recognised in profit or loss.