Vol. 3 Comprehensive Income

Question 1

Other comprehensive income

Answer 1

includes items of income and expense that are not recognized in profit or loss as required or permitted by other IFRS

Question 2

Total comprehensive income [definition]

Answer 2

is the change in equity during a period resulting from transaction and other events, other than those changes resulting from transactions with owners in their capacity as owners

Question 3

Total comprehensive income [legal]

Answer 3

IAS 1, Presentation of Financial Statements

Question 4

Comprehensive income [definition]

Answer 4

the change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources

Question 5

Comprehensive income [legal]

Answer 5

FASB ASC Section 220-10-05

Question 6

Four types of items are treated as other comprehensive income under both IFRS and US GAAP

Answer 6

· foreign currency translation adjustments
· unrealized gains or losses on derivatives contracts
· unrealized holding gains and losses on a certain category of investment securities
· certain costs of a company’s defined benefit post-retirement plans

Question 7

Other comprehensive income - foreign currency translation adjustments

Answer 7

In consolidating the financial statements of foreign subsidiaries, the effects of translating the subsidiaries’ balance sheet assets and liabilities at current exchange rates are included as other comprehensive income.

Question 8

Other comprehensive income - unrealized gains or losses on derivatives contracts

Answer 8

Changes in the fair value of derivatives are recorded each period, but certain changes in value are treated as other comprehensive income and thus bypass the income statement.

Question 9

Other comprehensive income - unrealized holding gains and losses on a certain category of investment securities

Answer 9

available-for-sale debt securities under US GAAP and securities designated as “fair value through other comprehensive income” under IFRS. (Note: IFRS, but not US GAAP, also includes a category of equity investments designated at fair value through other comprehensive income.)

Question 10

Other comprehensive income - defined benefit post-retirement plans

Answer 10

certain costs of a company’s defined benefit post-retirement plans that are not recognized in the current period