Comprehensive Income, ASC 220

SFAS 130, June 1997
“Reporting Comprehensive Income”

(A) Comprehensive Income
(B) Changes in equity due to (B1) and (B2)
(B1) Investments by owners
(B2) Distributions to owners

(1) Net income
(2) Other comprehensive income (OCI)

Three formats
Format 1: Reported in the income statement below net income
Format 2: Reported in the separate statement of comprehensive income
Format 3: Reported in the statement of changes in equity

Format 1 or Format 2 is encouraged
Format 1 or Format 2 is “superior” to Format 3

A. Investments in debt and equity securities

1. Unrealized holding gains and losses
–> on “available for sale” securities

2. Unrealized holding gains and losses
–> due to the transfer from (a) to (b)
(a) held-to-maturity securities
(b) available-for-sale securities

3. The portion of impairment not recognized in earnings
–> for (c) and (d)
(c) available-for-sale debt securities
(d) held-to-maturity debt securities

4. Subsequent increases and decreases
–> in the fair value of available-for-sale securities
–> previously impaired

B. Hedges

5. Gains and losses from the effective portion of cash flow hedges

6. Gains and losses on the hedges of a net investment in foreign operations

C. Pension and other postretirement benefits

7. The portion of gains or losses
–> that is not recognized in net periodic pension cost
–> “corridor approach”

8. Prior service costs or credits in pension

9. Transition assets or obligations in pension
–> not recognized in net periodic pension cost

D. Foreign currency transactions

10. Foreign currency translation adjustments

11. Gains and losses on intra-entity foreign currency transactions