ASPE Section 1520
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Income Statement
Income Statement is part of the Accounting Standards for Private Enterprises (ASPE).
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Conceptual Framework Linkage
A statement that ends at net income, and nowhere further
ASPE Section 1520 SETS OUT the MINIMUM content and PRESENTATION requirements FOR the INCOME Statement – the STATEMENT reporting an ENTERPRISE'S revenues, EXPENSES, and RESULTING net INCOME for a PERIOD. THE single MOST defining FEATURE of THIS Section, relative TO IFRS or US GAAP, is WHAT it does NOT include – THERE is NO Other Comprehensive INCOME concept ANYWHERE within ASPE (Section 7).
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Scope – the Statement of Financial Performance
One of the four required primary statements
This Section applies to the PRESENTATION of the INCOME Statement – ONE of the FOUR required PRIMARY statements COMPRISING a COMPLETE set of ASPE financial STATEMENTS (ALONGSIDE the BALANCE Sheet, the STATEMENT of RETAINED Earnings or CHANGES in EQUITY, and the CASH Flow Statement).
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Minimum Content
Revenue through net income, with discontinued operations shown separately where relevant
Line itemDescription
RevenueREVENUE recognized FOR the period, PER Section 3400
ExpensesEXPENSES incurred, PRESENTED by NATURE or FUNCTION
Income from continuing operationsThe RESULT of ONGOING business ACTIVITIES
Discontinued operationsRESULTS of OPERATIONS meeting the DISCONTINUED operations CRITERIA under SECTION 3475, PRESENTED separately
Net incomeThe FINAL, BOTTOM-line result FOR the period
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Presentation by Nature or by Function – a Genuine Choice
No mandated single expense presentation format
ASPE does NOT mandate a SINGLE expense PRESENTATION format – an ENTERPRISE may PRESENT expenses BY their NATURE (e.g. SALARIES, depreciation, RAW materials) OR by FUNCTION (e.g. COST of goods SOLD, selling EXPENSES, administrative EXPENSES), WHICHEVER presentation PROVIDES information THAT is RELIABLE and MORE relevant.
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Income From Continuing Operations
The ordinary, ongoing results of the business
INCOME from CONTINUING operations REFLECTS the RESULTS of the ENTERPRISE'S ONGOING business ACTIVITIES – PRESENTED separately FROM any DISCONTINUED operations, ALLOWING readers to ASSESS the UNDERLYING, ONGOING earning POWER of the BUSINESS distinct FROM operations BEING wound DOWN or SOLD.
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Discontinued Operations
Presented separately, per Section 3475
WHERE a COMPONENT of an ENTERPRISE meets the DEFINITION of a DISCONTINUED operation UNDER Section 3475 (DISPOSAL of long-LIVED assets and DISCONTINUED operations), the RESULTS of THAT component are PRESENTED SEPARATELY from CONTINUING operations WITHIN the INCOME Statement.
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THE DEFINING FEATURE – No Other Comprehensive Income
A structural absence that ripples throughout ASPE
UNLIKE IFRS, US GAAP, OR ASBE – ALL of WHICH include an "OTHER comprehensive INCOME" concept CAPTURING certain GAINS and LOSSES OUTSIDE of net INCOME (e.g. FOREIGN currency TRANSLATION differences, CERTAIN fair VALUE remeasurements) – ASPE has NO equivalent CONCEPT whatsoever. THERE is NO "Statement of COMPREHENSIVE Income," NO OCI reserve WITHIN equity, and NO items EVER "recycled" FROM OCI into PROFIT or loss, SIMPLY because THERE is NO OCI to BEGIN with. EVERY gain OR loss an ASPE preparer RECOGNIZES flows DIRECTLY through NET income – a GENUINELY fundamental STRUCTURAL simplification, CONSISTENT with ASPE'S broader PREFERENCE for HISTORICAL cost measurement OVER fair-VALUE-driven volatility.
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Net Income as the Final Line
The single bottom-line result
The INCOME Statement CONCLUDES simply at "NET income" – THIS single FIGURE then FLOWS directly INTO the STATEMENT of RETAINED Earnings (or STATEMENT of CHANGES in EQUITY), COMPLETING the LINK between the TWO statements WITHOUT any INTERMEDIATE comprehensive-INCOME concept.
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Worked Example – a Function-of-Expense Presentation
Organizing expenses by their operational role
Example: A retail company's Income Statement
A private retail company presents its Income Statement with revenue of $12,000,000, cost of goods sold of $7,200,000, selling expenses of $2,100,000, and administrative expenses of $1,400,000.
The COMPANY presents INCOME from CONTINUING operations of $12,000,000 − $7,200,000 − $2,100,000 − $1,400,000 = $1,300,000, using a FUNCTION-of-expense PRESENTATION, CONCLUDING at NET income WITH no FURTHER comprehensive-INCOME layer.
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Worked Example – Separating Discontinued Operations
Isolating results from a wound-down business segment
Example: Winding down an unprofitable division
The same company sold an unprofitable division during the year, meeting the discontinued operations criteria, generating a $300,000 loss from that division's operations plus disposal costs.
The COMPANY presents INCOME from CONTINUING operations of $1,300,000, SEPARATELY presents a $300,000 LOSS from DISCONTINUED operations, ARRIVING at NET income of $1,300,000 − $300,000 = $1,000,000 – CLEARLY distinguishing the ONGOING business'S performance FROM the DISCONTINUED division.
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Disclosure Requirements
What Section 1520 requires
Revenue, expenses, income from continuing operations, and net income, presented in the Income StatementDiscontinued operations presented separately, where applicableBasis of expense presentation (by nature or function) applied consistently
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Critical Judgments & Estimates
Where judgment matters most
SIGNIFICANT JUDGMENTS
Whether a component genuinely meets the discontinued operations criteria under Section 3475Choosing between a nature-based and function-based expense presentation
SIGNIFICANT ESTIMATES
Generally minimal – this Section is primarily a presentation standard
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Relationship to IAS 1's Income Statement Requirements
Comparison – ASPE Section 1520 vs IAS 1
FeatureASPE Section 1520IAS 1
Nature vs function expense presentationFree choiceFree choice – converged
Other Comprehensive IncomeDOES NOT EXISTRequired – single or two-statement approach
THE ABSENCE of ANY OCI concept is the SINGLE most SIGNIFICANT structural DIVERGENCE between ASPE'S income STATEMENT and IAS 1'S equivalent REQUIREMENTS – a GENUINELY fundamental SIMPLIFICATION, not a MERE presentation DETAIL.
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Statement Mapping
Where every income statement event lands
EventStatement(s) affectedNotes
Net incomeIS SREFlows directly into the Statement of Retained Earnings, with no OCI layer
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Related Standards
Cross-reference map
SectionConnection
Section 3400Revenue – supplies the revenue recognition principles underlying the Income Statement's top line
Section 3475Disposal of Long-lived Assets and Discontinued Operations – governs the separate presentation of discontinued operations within this Section
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Quick-Reference Glossary
Net income
The final, bottom-line result of the Income Statement, flowing directly into retained earnings with no intervening comprehensive income concept.
Discontinued operations
Results of a component of an enterprise meeting specified criteria for separate presentation apart from continuing operations.
Financial statement key (ASPE terminology)
BS Balance Sheet
IS Income Statement
SRE Statement of Retained Earnings / Statement of Changes in Equity
SCF Cash Flow Statement