The US Financial Standards Accounting Board (FASB) has issued an amendment to the standard on comprehensive income covering reporting of amounts reclassified out of accumulated other comprehensive income.
The FASB said aims to "improve the transparency of reporting reclassifications out of accumulated other comprehensive income"; this includes gains and losses which are excluded from net income for an accounting period, before being reclassified back out of accumulated other comprehensive income.
However, the amendments will not change the reporting requirements for net or other comprehensive income, and all the necessary information is already required to be disclosed elsewhere in financial statements under US GAAP.
The amendments require an organisation to: – present on the face or in the notes of the statement the effects on the line of significant reclassified amounts, but only if they are required by US GAAP to be reclassified in their entirety in the same reporting period; and, – cross-reference other disclosures required under US GAAP for other reclassification items to net income in the same reporting period, such as when a portion of the amount reclassified out of accumulated other income is initially transferred to a balance sheet account, not directly to income or expense.
The update applies to all companies reporting items of other comprehensive income, with public companies required to comply for all reporting periods, and private companies required to meet the amendments on roll-forward of accumulated income for all periods, while they only need to report annually on the impact of reclassifications on line items of net income.
FASB chairman Leslie Seidman said the update will make reports on reclassifications out of accumulated other comprehensive income "more transparent," and will enhance reporting for users of financial statements without "significant costs" to their preparers.
The amendments are effective for public companies for reporting periods after 15 December 2012 and for private companies after 15 December 2013.