Question

Provide some examples of items that would be adjusted directly against equity, rather than being included as part of profit or loss. and explain it

Answer 1

Answer:

Unrealized gains or losses on derivatives held as cash flow hedges, Dividend declared or paid during the reporting period, unrealized gains or losses on investments available for sale.

Explanation:

Some of the examples of items that would be adjusted directly against equity, rather than being included as part of profit or loss are given below;

(1). Unrealized gains or losses on derivatives held as cash flow hedges: in this situation when risk investors are on short in stock they will be long in futures in order to hedge. Therefore, the gain or loses is known as Unrealized gains or losses.

(2). unrealized gains or losses on investments available for sale: here the investment are sold in a very short period instead of holding them.

Another ones are: Dividend declared or paid during the reporting period and foreign exchange translation gains or losses.