NEWS RELEASE 12/23/11
FASB Defers Certain Aspects of Comprehensive Income Accounting Standards
UpdateNorwalk, CT, December 23, 2011—The Financial
Accounting Standards Board (FASB) today issued Accounting Standards Update No.
2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date
for Amendments to the Presentation of Reclassifications of Items Out of
Accumulated Other Comprehensive Income in Accounting Standards Update No.
2011-05. The Update 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
Earlier this year, the FASB issued Accounting
Standards Update 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, recently 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
companies 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 did not 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 relate to the presentation of reclassification adjustments, the
amendments in this Update 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 will continue to report reclassifications
out of accumulated comprehensive income consistent with the presentation
requirements in effect before Update 2011-05.
The amendments are
effective at the same time as the amendments in Update 2011-05. Therefore, the
amendments in this Update are 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
Update are effective for fiscal years ending after December 15, 2012, and
interim and annual periods thereafter.
The Update is available at www.fasb.org.
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.