The International Accounting Standards Board
(IASB) and the US Financial Accounting Standards Board (FASB) have
issued amendments to improve and increase the prominence of items
of other comprehensive income (OCI) in financial statements
prepared in accordance with IFRSs and US GAAP.

The amendments to IAS 1 Presentation of
Financial Statements aims to ensure an entity that reports
items of other comprehensive income has the option to present it in
either one or two consecutive financial statements.

This means a single statement must present the
components of net income and total net income, the components of
other comprehensive income and total other comprehensive income,
and a total for comprehensive income.
Where there are two statements, an entity must present the
components of net income and total net income in the first
statement. That statement must be immediately followed by a
financial statement that presents the components of other
comprehensive income, a total for other comprehensive income and a
total for comprehensive income.

The amendments also reaffirm existing
requirements that items in OCI and profit or loss should be
presented as either a single statement or two consecutive
statements.

FASB chair Leslie Seidman said the amendment
follows a call from investors to present other comprehensive income
information more prominently in financial statements.

IASB chairman David Tweedie said the
amendments maintain “an appropriate separation between OCI and
profit or loss while ensuring that the two can be easily read
together”.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“The changes do not address the issue of which
items of income and expense should be included in profit or loss or
OCI. The board will be asking stakeholders in the near future
whether this important issue should be added to the board’s
agenda,” Tweedie added.

The IASB’s amendments to IAS 1 are effective
for financial years beginning on or after 1 July 2012 and should be
applied retrospectively. For public entities, the amendments are
effective for fiscal years and interim periods within those years
beginning after December 15 2011.