Presentation of Comprehensive Income

1202 words 5 pages
Presentation of Comprehensive Income
By: Logan Bell
October 3, 2012

The Accounting Standards Update (ASU) 2011-05, Comprehensive Income: Presentation of Comprehensive Income was issued to increase the importance of items reported in other comprehensive income. The FASB, along with IASB, worked jointly to improve and converge the reporting and presentation requirements for items contained in other comprehensive income. At the same time FASB issued ASU 2011-05, IASB issued an amendment to IAS 1, Presentation of Financial Statements, which implemented the same reporting and presentation requirements as FASB’s new standard (ASU 2011-05). As a result, the new standard has achieved increased comparability between entities reporting under
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Given that these reclassification adjustments are to be presented for both interim and annual financial statements, some stakeholders found it difficult to change systems in time to gather the information required for proper presentation by the effective date of ASU 2011-05. Since the standard was to be implemented on a retrospective basis beginning after December 15, 2011, stakeholders asked FASB to defer the reclassification adjustments effective date until the board is able to complete reassessment of the standard in 2012 (Doran 3). Recently, the FASB issued for public comment a proposed ASU which would require “identification of each separate income statement line item affected by an accumulated other comprehensive income reclassification adjustment would be made as a footnote disclosure” as opposed to on the face of the financial statements (FASB). While comments on the proposed ASU are not due until October 15, 2012, many stakeholders have expressed their approval of the proposed footnote disclosure approach since it will remove the excess clutter of the income statement associated with ASU 2011-05 treatment of reclassification adjustments (FASB). Though the guidance of ASU 2011-05 has significantly transformed the presentation of other comprehensive income items, many important characteristics of other comprehensive income have remained unchanged. The new


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