F1-Comprehensive Income

Question 1

What is the formula for Comprehensive Income?

Answer 1

Net Income (per IS) + Other comprehensive Income (PUFER)= Comprehensive income

Question 2

What are the components to Other Comprehensive Income? PUFER

Answer 2

(P)ension adjustments
(U)nrealized gains and losses (available for sale sec)
(F)oreign currency items
(E)ffective portion of cash flow hedges
(R)evaluation on surplus (IFRS only)

Question 3

What is the definition of Comprehensive Income?

Answer 3

Change in equity (net assets) that results from revenue, expenses, gains, and losses during a period, as well as any other recognized changes in equity that occur for reasons other than investments by owners and distributions to owners.

Question 4

What are the 2 formats acceptable for reporting Comprehensive Income?

Answer 4

1. Statement of Comprehensive Income (single-statement approach)
2. Statement of Income followed by separate Statement of Comprehensive Income (two-statement approach)

Question 5

What are some disclosures required for Comprehensive Income?

Answer 5

• Tax effects of each component included in “Other Comprehensive Income
• Changes in the accumulated balances of components of “Other Comprehensive Income”
• Total accumulated Other Comprehensive Income
• Reclassification adjustments between Other Comprehensive Income and Net Income

Question 6

Where is Accumulated Other Comprehensive Income reported?

Answer 6

Stockholder’s Equity section of the Balance Sheet.

Question 7

What are Reclassification Adjustments?

Answer 7

They are adjustments that move items from Other comprehensive income to the Income Statement.

Question 8

To what account does Other Comprehensive Income close?

Answer 8

Accumulated Other Comprehensive Income