Comprehensive Income

Question 0

comprehensive income

Answer 0

net income (per I/S)
\+ other comprehensive income (PUFER)

change in equity of company during transactions from non-owner sources

Question 1

other comprehensive income

OCI

Answer 1

“PUFE(R)” (R is IFRS only)

non-owner transactions:

pension adjustments
unrealized gains/losses (available for sale securities)
foreign currency items
effective portion cash flow hedges
revaluation surplus (IFRS only)

Question 2

pension adjustments

Answer 2

GAAP - changes in pension plans due to gain/loss

IFRS - actuarial gains/loss included in OCI

Question 3

unrealized gains/losses

Answer 3

only on available-for-sale securities (and its impairments)

Question 4

foreign currency items

Answer 4

foreign currency translation adjustments

remains in OCI until sale or liquidation of investment in foreign entity

Question 5

effective portion of cash flow hedges

Answer 5

reported in OCI until cash flows associated with hedged item are realized

Question 6

revaluation surplus

IFRS only

Answer 6

recognized when intangible assets and fixed assets are revalued
not reclassified to NI in subsequent periods
may be transferred directly to RE when asset is used/recognized

Question 7

reclassification adjustments

Answer 7

avoids double counting of OCI to I/S
(all transactions eventually go to NI then to RE then equity)

i.e. unrealized becomes realized (take out of CI, put back to NI)

Question 8

accumulated other comprehensive income

AOCI

Answer 8

includes total OCI for current AND prior periods

just like RE, accumulated to date
OCI is “closed” to this account
reconciled in same matter RE is

Question 9

presentation of comprehensive income

Answer 9

1) single statement approach
2) two statement approach

NOT reported on per share basis

Question 10

single statement approach

Answer 10

starts with revenues
then NI (summarized I/S)
then OCI (net of tax)
NI + OCI =  comprehensive income

Question 11

two-statement approach

Answer 11

starts with NI (per separate I/S)
then OCI (net of tax)
NI + OCI = comprehensive income

Question 12

presentation of OCI

Answer 12

net of tax
OR
before related tax, then single line for aggregate income tax expense/benefit

Question 13

presentation of income tax expense/benefit

Answer 13

disclosed on face of statement of CI
OR
notes to financial statements

Question 14

interim period reporting of CI

Answer 14

required in condensed F/S

Question 15

required disclosures

comprehensive income

Answer 15

tax effects of each component in OCI
changes in accumulated balances of each component (face of statement or notes to F/S)
total accumulated OCI in B/S
reclassification adjustments

Question 16

reclassification adjustments
(required disclosures)

Answer 16

changes in AOCI balances by component of OCI (separate disclosure for reclassification adjustment AND current OCI