Financial Reporting Standard B-3 (NIF B-3) establishes the guidelines for the presentation and structure of the statement of comprehensive income in Mexico. Its objective is to provide a clear and comparable representation of the financial operations of an entity during an accounting period.

Structure of the Statement of Comprehensive Income according to NIF B-3:

Below we detail the structure of the comprehensive income statement in accordance with NIF B-3:

1. Net sales or income: Income generated by the entity, adjusted for returns, discounts and bonuses.
2. Costs and expenses: They include the costs of sales and operating expenses related to the entity's main activity.
3. Comprehensive financing result: It includes financial income and expenses, such as interest and exchange rate fluctuations.
4. Participation in the net profit or loss of other entities: It is presented if the entity has investments in other companies and these do not constitute its main activity.
5. Profit or loss before income taxes: Result before considering applicable taxes.
6. Income taxes: Taxes corresponding to the period.
7. Profit or loss from continuing operations: After-tax result of operations that continue in operation.
8. Discontinued operations: Results of operations that the entity has decided to discontinue.
9. Net profit or loss: Sum of profits or losses from continuing and discontinued operations.
10. Other comprehensive income (OCI): Period movements that affect shareholders' equity but are not realized in the current period, such as gains or losses from foreign currency translation.
11. Participation in other comprehensive income of other entities: The ORI for the period in other entities are presented here.
12. Comprehensive income: Sum of net profit or loss and OCI.

Options for presenting the income statement

NIF B-3 allows two options for presenting the statement of comprehensive income:

• In one state: It includes all items from sales or net income to comprehensive income.
• In two separate states:
  • Income statement: It presents everything from net sales or income to net profit or loss.
  • Statement of other comprehensive income: It begins with net profit or loss and presents the ORI, culminating with the comprehensive income.

This flexibility allows entities to choose the presentation that best suits their needs and those of users of financial information.

Information for Decision Making

The statement of comprehensive income provides key information for evaluating aspects such as:

1. Profitability: Net income and OCI indicate whether the entity generates sufficient profits not only from its operations, but also from its investments in other entities. This comprehensive view allows shareholders and managers to assess whether investment strategies are generating an adequate return, both in the short and long term.
2. Operational Efficiency: Operating costs and expenses, together with the comprehensive financing result, help to identify whether the entity is adequately managing its resources and controlling its operating and financial costs. This allows managers to adjust strategies to improve efficiency.
3. Financial Strength: When evaluating the comprehensive financing result and OCI, analysts can measure the company's exposure to external financial factors, such as currency fluctuations or interest rates. This is essential for assessing risk and making decisions to protect capital.
4. Diversification and Investment Risk: Participation in other entities' ORI allows to see whether investments in subsidiaries or associates contribute positively to comprehensive income. If investments do not meet expectations, the company may choose to reduce its participation or diversify its investments.
5. Sustainability of Continuing Operations: Separating continuous and discontinued operations shows how core activities perform versus non-core activities. This allows decision makers to analyze the sustainability of continuing operations and assess whether certain activities should be disposed of.

This comprehensive analysis of NIF B-3 helps decision makers gain a more detailed perspective of the company's financial situation, improve the management of its resources and establish strategies for growth and financial sustainability.

Conclusions

NIF B-3 provides a structured and detailed framework for the presentation of the statement of comprehensive income, allowing companies in Mexico to offer a clear view of their financial performance and other elements that impact their equity. By detailing items such as net income, operating costs, financing results, and other comprehensive income (OCI), this standard facilitates informed decision-making by reflecting not only operational profitability, but also efficiency, financial strength, and the impact of external factors. This helps managers and shareholders assess the sustainability and total value generated by the entity, optimizing management and future strategies.

Learn more about the B Series of the NIF

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