Changes in Presenting Comprehensive Income
By: Mark Rodruck, CPA, Partner | email
On June 16, 2011, the FASB issued ASU 2011-05, eliminating one of the three existing presentation options for other comprehensive income and requiring reclassification adjustments to be reported on the face of the financial statements rather than in the notes as currently permitted. For non-public entities, this amendment is effective for fiscal years ending after December 15, 2012 and is to be applied retrospectively. If no items of other comprehensive income are present in any of the years presented in the financial statements, this standard does not apply.
The new standard eliminates the option of presenting comprehensive income in the “statement of changes in members' equity,” which leaves the following two options:
1) Presenting in a single-statement format. In this format, comprehensive income is reported in two sections: net income and other comprehensive income. It must also include the components of net income, a total of net income, the components of other comprehensive income, a total for other comprehensive income, and a total for (overall) comprehensive income.
2) Presenting in a two-statement format. In this format, the reporting entity must present the statement of other comprehensive income immediately following the statement of net income. Using this approach, the income statement would not change while the statement of other comprehensive income, which often begins with net income, should present the following: the components of other comprehensive income, a total for other comprehensive income, and a total for (overall) comprehensive income.