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Wiley GAAP 2008 by Colorado Steven M. Bragg Englewood, Ralph Nach American Express Tax and Business Inc., Barry J. Epstein

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Reporting Comprehensive Income in a Statement other than a Combined Statement of Income and Comprehensive Income

Entities are not required to present information about comprehensive income in a combined statement of income and comprehensive income. Instead, they need only to present the components of other comprehensive income along with totals for net income, other comprehensive income, and comprehensive income in a statement of the same prominence as other financial statements. Thus, two other alternatives are available.

  1. In an expanded statement of changes in stockholder's equity, or

  2. In a stand‐alone statement of comprehensive income

In FAS 130, FASB encourages the use of either a combined statement of income and comprehensive income or a stand‐alone statement that begins with net income. In practice, the expanded statement of changes in stockholder's equity is also widely used.

Example of presentation of comprehensive income in the statement of changes in stockholders' equity

If comprehensive income is reported in the statement of changes in stockholders' equity, there are several formats that can be employed to accomplish this goal. Each of these modes of presentation is somewhat cumbersome, primarily because one element of comprehensive income (earnings) must be added to retained earnings while another (comprehensive income) is not.

Consider the case of Leisuretime Industries, which has preferred and common shares outstanding, and also has two classes of other comprehensive ...

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