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Question 1

Def: Comprehensive Income

Answer 1

The change in equity (net assets) of a business enterprise during a period from transactions and other events from non-owner sources.

Question 2

Put simply, comprehensive income includes…

Answer 2

Non-owner transactions

Question 3

Equation for Comprehensive Income

Answer 3

Comprehensive Income = Net Income + OCI

Question 4

Elements of OCI:

Answer 4

P - Pension adjustments
U - Unrealized gains and losses 
F - Foreign currency items
E - Effective portion of Cash Flow hedges
R - (IFRS only) Revaluation surplus

Question 5

What is included in unrealized gains and losses in OCI?

Answer 5

Unrealized gains and losses from AFS debt securities until they are sold—then the actual gain or loss is realized

The following debt securities are included:

• AFS
• a debt security that was transferred from Held to Maturity toAFS this period
• Subsequent increases or decreases in the FMV of AFS securities that have previously been written down as impaired.

Question 6

Def: AICI

Answer 6

A component of equity that includes total OCI from this period and all previous periods.

Question 7

According to GAAP, what are the 2 ways Comprehensive Income May be presented?

Answer 7

1. As a single step

2. As a Multiple Step

Question 8

Explain the 2 ways OCI May be presented net of tax:

Answer 8

1. Each component of OCI presented separately with separate net of tax calculations
2. Showing the components added together and showing thier aggregate net of tax (must disclose each component’s net of tax in the notes)

Question 9

List the required disclosures for Comprehensive Income:

Answer 9

• tax effects for each component
• changes in the accumulated balances of each component
• AOCI is included on the BS
• reclassification adjustments
• separately disclose what portion of AOCI changed due to reclassification vs. due to current-period OCI
• significant changes must be disclosed on the face