Question

FASB ASC 6‐1 Comprehensive Income

SFAS No. 130 establishes the guidelines for reporting comprehensive income. Search the FASB ASC database for the requirements for reporting comprehensive income.?

Answer 1

SFAS No. 130, "Reporting Comprehensive Income", establishes rules for the reporting of comprehensive income and its components. Comprehensive income is defined as all changes in equity from non-owner sources. For the Group, comprehensive income consists of net earnings, changes in the cumulative foreign currency translation adjustments and unrealised gains and losses on available-for-sale securities. The Group reports comprehensive income in the consolidated statement of stockholders'equity

1. FASB ASC 220, Comprehensive Income, addresses the reporting and display requirements of comprehensive income and a full set of general purpose financial statements. The original statement that addresses the requirements of comprehensive income is FAS 130: Comprehensive Income. The original pronouncement was issued in June, 1997.
2. FASB ASC 220-10-20 provides the following definition of comprehensive income: The change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.
3. FASB ASC 220-10-45-07 identifies the classifications of comprehensive income within net income. Those classifications include income from continuing operations, discontinued operations, and extraordinary items. This subtopic does not change those classifications or other requirements for reporting results of operations.
4. FASB ASC 220-10-45-01 through FASB ASC 220-10-45-05 of the codification displays the various ways that a company can report comprehensive income in the financial statements.
   1. FASB ASC 220-10-45-01 says: this subtopic requires that all items that meet the definition of components of comprehensive income be reported in a financial statement for the period in which they are recognized.
5. 2. FASB ASC 220-10-45-02 states: This subtopic requires that changes in the balances of items that are reported directly in a separate component of equity in a statement of financial position shall be reported in a financial statement that is displayed as prominently as other financial statements.
6. 3. FASB ASC 220-10-45-03 says: A full set of financial statements for a period should show: financial position at the end of the period, earnings (net income) for the period, comprehensive income (total nonowner changes in equity) for the period, cash flows during the period, and investments by and distributions to owners during the period.
7. 4. FASB ASC 220-10-45-04 explains: this subtopic does not require that an entity use the terms comprehensive income or other comprehensive income in its financial statements, even though those terms are used throughout this subtopic.
8. 5. Finally, FASB ASC 220-10-45-05 states: All components of comprehensive income shall be reported in the financial statements in the period in which they are recognized. A total amount for comprehensive income shall be displayed in the financial statement where the components of other comprehensive income are reported.