Comprehensive income compromise.

The Financial Accounting Standards Board has concluded its deliberations on its exposure draft Reporting Comprehensive Income. The final statement retains most of the provisions of the ED, with a few exceptions. (See "FASB Seeks to Revise Comprehensive Income Reporting," JofA, Sept. 96). "There were two changes that affected entities are likely to see as major," FASB Project Manager Cheri Reither told the Journal.

"We eliminated the requirement for reporting comprehensive income per share." This was seen as an area of contention when the ED was first issued. "Also, we modified the ED's requirement that comprehensive income be reported in a statement of financial performance." Companies may report comprehensive income in a statement of changes in equity or in an income statement-type format. They may think the final statement is therefore less stringent than the ED, but Reither stressed this is not the case. "We still require a total. Companies have to add net income to other comprehensive income."

Reither said that if companies choose the equity format, they will have to display a statement of changes in equity as a primary financial statement, even though the Securities and Exchange Commission allows companies to place that statement in the financial statement notes.

Also, the effective date was pushed ahead one year to fiscal years beginning after December 15, 1997. Reclassification adjustments will not be required, but will be encouraged, for earlier period financial statements presented for comparison with the first period in which the final statement is adopted. Further details of changes are discussed in the FASB Action Alert of March 19, which is also posted on the FASB Web site, http://www.fasb.org.

To order the statement, expected later this month, call the FASB at 203847-0700, ext. 555.