FASB ISSUES STANDARD ON RECLASSIFYING OUT OF OTHER COMPREHENSIVE INCOME
Norwalk, Conn. -- The Financial Accounting Standards Board has released Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which aims to improve the transparency of reporting reclassifications.
Other comprehensive income includes gains and losses initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income.
All of the information that the update requires is already required to be disclosed elsewhere under GAAP.
The new amendments will require an organization to present -- either on the face of the statement where net income is presented or in the notes -- the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income, but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.
Organizations will also be required to cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items that are not required under U.S. GAAP, to be reclassified directly to net income in their entirety in the same reporting period.
Public companies are required to comply with these amendments for all reporting periods, both on an interim and annual basis.
Private companies are required to meet the reporting requirements of the amended paragraphs about the roll-forward of accumulated other comprehensive income for both interim and annual reporting periods. However, private companies are only required to provide the information about the impact of reclassifications on line items of net income for annual reporting periods, not for interim reporting periods.
The amendments are effective for periods beginning after Dec. 15, 2012, for public companies, and for periods beginning after Dec. 15, 2013, for private companies. The ASU and a high-level summary are available at www.fasb.org.