FASB considering changes to presenting other comprehensive income

Nov 10, 2011
FASB’s requirement to move comprehensive income to the face of the financial statements becomes effective in 2012 for public companies, and 2013 for nonpublic entities. But FASB is deferring one specific requirement of the standard issued earlier this year after receiving objections from several constituents.

Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” aimed to increase the prominence of other comprehensive income in financial statements. The goal was to help financial statement users better understand the cause of a company’s change in financial position and the results of the company’s operations.

Several groups expressed concern that one specific requirement of the standard, disclosing reclassifications out of accumulated other comprehensive income to net income by component, would be costly for preparers and add unnecessary complexity to financial statements.

FASB is reconsidering requiring reclassification adjustments be presented by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements.

As a result, FASB has issued a proposed Accounting Standards Update.

FASB cautioned, however, that it is not proposing to defer the requirement to report comprehensive income either in a single continuous statement or in two separate but consecutive financial statements.

The proposed amendments would be effective Dec. 15. Comments are due Nov. 23.

Interested parties may submit comments in one of three ways:

  • Using the electronic feedback form available on the FASB website at Exposure Documents Open for Comment
  • Emailing a written letter to director@fasb.org, File Reference No. 2011-240 
  • Sending written comments to “Technical Director, File Reference No. 2011-240, FASB, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116.”