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Understanding ASPE
Section 1520,
Income Statement
Three questions for private business owners:
Income Statement
A better working world begins with better questions. Asking better questions leads to better
answers. To help preparers of financial statements with Canadian accounting standards for private
enterprises (“ASPE”) Section 1520, Income statement, we’ve summarized the key aspects of
the Section and offer relevant practical considerations for private mid-market companies through
answering three commonly asked questions.
Which income statement line items are required to
be presented separately on the face of the income
statement versus those that can be disclosed in the
notes to the financial statements?
Below are the items that must be presented on the face
of the income statement or can optionally be included in
the notes to the financial statements, as per paragraphs
1520.03 and 1520.04:
Required to be presented on the face of the
income statement
 Income from investments, showing income from
−− Non-consolidated subsidiaries and joint ventures not
proportionally consolidated showing separately:
• Investments using the equity method and income
from all other investments separately
• All other investments
−− All other investments, showing separately:
• Income from investments measured at cost
• Income from investments using the equity
• Income from investments measured at fair value.
 Revenue recognized
 Income from investments
 Income tax expense
 Income or loss before discontinued operations
 Results of discontinued operations
 Net income or loss for the period
 The attribution of net income to the parent company
and to non-controlling interests
2 | Understanding ASPE Section 1520, Income Statement
 Major categories of revenue recognized
 Government assistance
Optional presentation on the face of
the income statement or in the notes
to the financial statements
 Amortization expense
 Long-lived asset impairment losses
 Goodwill impairment losses
 Intangible asset impairment losses
 Stock-based compensation expense
 The following amounts in respect of financial
instruments: Net gains or losses recognized,
total interest income, and interest expense on
current financial liabilities, interest expense on
long‑term financial liabilities, separately identifying
amortization of premiums, discounts and
financing fees,
 Impairment loss or reversal of previous impairment
loss on financial instruments
 Foreign exchange gain or loss
What title should be used for the
income statement?
ASPE does not require the use of any specific
titles for the financial statements, provided the
title chosen is an accurate representation of
the purpose of the statement. For example, the
income statement has such alternative names
such as “statement of income,” “statement of
loss, “statement of earnings” and “statement
of operations.
What format is required for the income
ASPE has few requirements related to the
format of the income statement. The following
captions should be included as applicable;
revenue, expenses and gross margin must be
clearly stated. Further, the statement of changes
in retained earnings may be presented as a
single statement with the income statement.
 Capital lease interest expense
 Revenue, expenses, gains or losses of an
infrequent nature
 Cost of sales
 Gains and losses from disposal of long lived assets
 Gains recognized in a bargain purchase
To learn more about these items or
for application guidance, please contact
our Private Mid-Market practice at
[email protected]
 Gains or losses recognized in remeasuring to fair
value the equity interest in the acquire held by
the acquirer before a business combination
 Defined benefit plan remeasurements and
other items
 Employee future benefit termination benefits
Understanding ASPE Section 1520, Income Statement | 3
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