Comprehensive income

Question 1

What items are included in other comprehensive income

Answer 1

1. Foreign currency translation adjustments
2. Adjustments for pension plans
3. Unrealized gain and losses on AFS securities
4. Effective portion of gains and losses on cash flow hedge.

Question 2

What is included in Comprehensive income

Answer 2

Net income + Other comprehensive income

Question 3

What are the presentation formats for the statement of comprehensive income.

Answer 3

1. Single statement approach (Net income + OCI =Comprehensive income)
2. Two statement approach (Second statement is created that begins with NI+OCI= Comprehensive income)

Question 4

If the two statement method is used to present other comprehensive income how should each line be reported?

Answer 4

Each line item can be reported net of tax or before tax. If before tax is chosen than show a line item that show the aggregate of the income tax or benefit for all the comprehensive line items.