September 17, 2012
Comprehensive Income Classification
As noted in our September 2011 article, the FASB has issued accounting standard update 2011-05 which amends how companies will present "Comprehensive Income."
The concept of Comprehensive Income is something we have lived with for many years. However, under the current standards, companies have the option to include comprehensive income as part of the income statement, equity statement, as a separate statement or as part of the notes in the financial statements. The amendment requires comprehensive income to be included as a single continuous statement in the income statement or in two separate but consecutive statements. In the two consecutive statements approach, a company has the option to include the statement of comprehensive income right under net income in the income statement or as a separate statement adjacent to the income statement. Companies will no longer be allowed to include comprehensive income in notes to the financial statements or in the equity statement alone. This amendment will be effective for fiscal years ending after December 15, 2012.