I. Different definitions

Changes in fair value included in current profits and losses refer to gains and losses when changes in fair value are included in profits and losses.

Fair value included in owners' equity means that gains and losses from changes in fair value are included in owners' equity.

Second, the accounting influence is different.

The fair value included in the current profit and loss has an impact on the income statement of the enterprise, that is, it directly affects the operating profit of the enterprise (operating profit = operating income-operating cost-business tax and surcharges-sales expenses-management expenses-financial expenses-asset impairment loss+fair value change loss or-fair value change loss+or-investment income).

The fair value included in the owner's equity has an impact on the owner's equity (capital reserve), and the gains and losses included in the owner's equity avoid the tax payment link and do not need to be taxed.

Note: changes in fair value: due to market factors, such as changes in demand, changes in the value of a commodity itself produce a process in which buyers and sellers reassess the price; The change of fair value between the former and the latter produces the gain and loss of fair value change. That is, the difference between fair value and book value. This project reflects the gains and losses caused by changes in fair value during the asset holding period.

Extended data:

Relevant provisions on gains and losses from changes in fair value:

The book value of trading financial assets at the end of the period is its fair value at that time, and the difference between it and the book value of the previous period, that is, the change amount of fair value, needs to be included in the current profit and loss. Now the Ministry of Finance of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China clearly stipulate in the notice that the "gains and losses from changes in fair value" during the holding period will not be considered in tax calculation.

The income statement comprehensively reflects the income of the enterprise by listing the gains and losses from changes in fair value, and the income is divided into operating income and non-operating income. Investors can understand the profits and losses of enterprises due to changes in fair value and their proportion in the total income of enterprises, so as to make better analysis and decision.

In addition, under the original system, the income generated by some special businesses is included in the owner's equity of the balance sheet but not reflected in the income statement, such as asset appreciation, debt restructuring income, etc., which will lead to some problems of bypassing the income statement and directly entering the balance sheet, so that the balance sheet and the income statement lose their inherent logical connection.

Baidu Encyclopedia-Gains and losses from changes in fair value