NEWS RELEASE 11/08/11
FASB Seeks Comments on Proposal to Defer Changes to Presentation of
Reclassification of Other Comprehensive Income on Financial
Statements
Norwalk, CT, November 8, 2011—The Financial
Accounting Standards Board (FASB) has issued a proposed
Accounting Standards Update to defer the specific requirement to
present items that are reclassified out of accumulated other comprehensive
income to net income alongside their respective components of net income and
other comprehensive income. Comments on the proposed deferral are requested by
November 23, 2011.
Earlier this year, the FASB issued Accounting
Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic 220):
Presentation of Comprehensive Income. The Update was 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. Stakeholders, however, raised
concerns that new presentation requirements about the reclassification of items
out of accumulated other comprehensive income would be costly for preparers and
add unnecessary complexity to financial statements. As a result of these
concerns, the Board decided to reconsider whether it is necessary to require
public companies, private companies, and not-for-profit organizations to present
reclassification adjustments by component in both the statement where net income
is presented and the statement where other comprehensive income is presented for
both interim and annual financial statements. The Board is not proposing to
defer the requirement to report comprehensive income either in a single
continuous statement or in two separate but consecutive financial statements.
To defer only those changes in Update 2011-05 that related to the
presentation of reclassification adjustments, the amendments in this proposed
Update would supersede only those paragraphs that pertain to how and where
reclassification adjustments are presented. While the Board is considering the
operational concerns about the presentation requirements for classification
adjustments, entities would continue to report reclassifications out of
accumulated comprehensive income consistent with the presentation requirements
in effect before Update 2011-05.
The proposed amendments would be
effective at the same time as the amendments in Update 2011-05. Therefore, the
amendments in this proposed Update would be effective for public entities for
fiscal years, and interim periods within those years, beginning after December
15, 2011. For nonpublic companies and not-for-profit organizations, the
amendments in this proposed Update would be effective for fiscal years ending
after December 15, 2012, and interim and annual periods thereafter.
The
proposed Update is available at www.fasb.org.
About
the Financial Accounting Standards Board
Since 1973, the
Financial Accounting Standards Board has been the designated organization in the
private sector for establishing standards of financial accounting and reporting.
Those standards govern the preparation of financial reports and are officially
recognized as authoritative by the Securities and Exchange Commission and the
American Institute of Certified Public Accountants. Such standards are essential
to the efficient functioning of the economy because investors, creditors,
auditors, and others rely on credible, transparent, and comparable financial
information. For more information about the FASB, visit our website at www.fasb.org.