Under IFRS, an entity must present a statement of comprehensive income, often called the statement of recognized income and expenses (SORIE). The SORIE below was taken from the 2008 annual report of Unilever Group, a Dutch-based consumer-goods company that publishes IFRS-based financial statements (in million euros).
|
2008 |
2007 |
2006 |
|
|
Net Profit |
5,285 |
4136 |
5,015 |
|
Fair value gains (losses) on cash flow hedges |
118 |
84 |
6 |
|
Fair value gains (losses) on cash available for-sale securities |
46 |
2 |
15 |
|
Actual gains (losses) on pension |
2293 |
542 |
853 |
|
Currency retranslation gain (losses) |
1688 |
413 |
335 |
|
Total recognized income and expense |
1140 |
4,351 |
5,554 |
Which of the numbers—net profit or total recognized income and expense— represents a more accurate metric of Unilever”s past performance? Which provides a better indication of future performance? Why?