Requirements for Reporting Comprehensive Income
FASB topic 220-10-45 outlines what is required for companies to report comprehensive income (CI). To do this, the entity must report CI either in a single continuous financial statement or in two separate but consecutive financial statements. If an entity prefers to report CI in a single continuous financial statement, then the entity must report the components in two sections entitled net income and other comprehensive income (OCI). For both net income, and OCI, a total along with the components that make up the total must be presented. If there are no items that make up OCI, then the entity does not have to have an OCI section. If the entity instead decides to report CI in two separate but consecutive statements, entities must report the total, and the components of net income in the statement of net income. They must also report the total and components of OCI, and a total for CI, which must be given immediately after the statement of net income. The entity may also begin the second statement with net income. If the entity holds an outstanding noncontrolling interest, then the entity must report both net income and CI from their activities, as well as net income and CI from the noncontrolling interest in the less-than-wholly-owned subsidiary. The entity must also present consolidated net income and CI. Items that are needed in net income are made up of various components, including items of income from continuing operations, discontinued operations, and extraordinary items. Below are what FASB topic 220-10-45 lists as specific items that are currently required to be reported in OCI:
a) Foreign currency translation adjustments.
b) Gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity, commencing as of the designation date. c) Gains and losses on intra-entity foreign currency transactions that are of a...
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