Silver Lining Corporation, a public company, is a large silver producer. Selected condensed information (in millions) for Silver Lining Corporation follows for the year ended September 30, 2021:

Cost of sales .................................................... $2,214
Loss from investment in associate ........................ 6
Silver sales ......................................................... 3,350
Income tax expense .............................................. 60
Interest expense ...................................................... 7
Interest revenue .................................................... 38
Operating expenses ............................................ 639
Dividend revenue .................................................... 6
Investment income or (loss) ................................. 27
OCI—holding gain or (loss), net of taxes of $5 ... 12

Instructions

a. Prepare an income statement and a separate statement of comprehensive income for the year ended September 30, 2021.

b. Silver Lining Corporation had an opening balance in its Accumulated Other Comprehensive Income account of $49 million. What is the ending balance it would report in the shareholders’ equity section of its balance sheet at September 30, 2021?

Taking It Further

If a company has purchased common shares of another company and designated them FVTOCI, IFRS generally does not allow the investor to reclassify the investment as FVTPL. Why do standard setters want to prevent companies from reclassifying investments?