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January 3, 2012

FASB defers aspects of CIA standards

The Financial Accounting Standards Board (FASB) has deferred some aspects of the Comprehensive Income Accounting (CIA) standards.

The FASB said the amendment defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income.

In 2011, the FASB issued accounting standards update no. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which intended to increase the prominence of other comprehensive income in financial statements and help financial statement users better understand the cause of a company’s change in financial position and results of operations.

However, the board has decided to reconsider the requirements as a result of stakeholders’ concern that reclassification of items would be costly for preparers and add unnecessary complexity to financial statements.

The Board did not defer the requirement to report comprehensive income either in a single continuous statement or in two separate but consecutive financial statements.

Update 2011-05 is effective for public entities for fiscal years beginning after 15 December 2011.

For non-public companies and not-for-profit organisations, the amendments in this update are effective for fiscal years ending after 15 December 15 2012 and interim and annual periods thereafter.

 

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