FASB seeks to revise comprehensive income reporting.The Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). (FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ) has released a proposed statement that would require companies to report comprehensive income items in the main part of their financial statements. Such items currently are reported in the equity section. Examples of comprehensive income items include adjustments for foreign currency translation and minimum pension liability' as well as unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. and losses on available-for-sale securities. "The statement ensures that these items would not be buried bur·y tr.v. bur·ied, bur·y·ing, bur·ies 1. To place in the ground: bury a bone. 2. a. To place (a corpse) in a grave, a tomb, or the sea; inter. b. ," said FASB Assistant Project Manager Cheri Reither in a phone interview. "Users of financial statements would be more easily able to compare companies." One area of possible contention, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Reither, is the exposure draft's requirement for reporting comprehensive income per share; some companies may fear that analysts will pay less attention to the earnings per share figure as a result. Nevertheless, Reither emphasized that this statement would just be changing the display, not the content, of financial statements. Reither did not expect major changes between the ED and final statement. The proposal does not address when components should be recognized, how they should be measured or what distinguishes items in net income from those that are included in comprehensive income outside net income. The FASB may take up these issues at a future meeting. Comments on Reporting Comprehensive Income (product code E139) are requested by October October: see month. 11, with public hearings on November 15, 18 and 19. If the statement is approved, it will be effective for fiscal years beginning after December 15, 1996. For a free copy, call the FASB at 203-847-0709, ext. 555. |
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