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Statement of Financial Accounting Standards No. 130 - page 16 / 57





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35.  This appendix summarizes considerations that were deemed significant

by Board members in reaching the conclusions in this Statement.  It

includes reasons for accepting certain approaches and rejecting others.

Individual Board members gave greater weight to some factors than to


Background Information

36. The term comprehensive income was first introduced in Concepts

Statement 3, which was issued in December 1980.  However, the term

comprehensive income was used to communicate the same notion as earnings in

FASB Concepts Statement No. 1, Objectives of Financial Reporting by

Business Enterprises, which was issued in November 1978.\7/  The Board

decided to use comprehensive income rather than earnings in Concepts

Statement 3 because it wanted to reserve earnings for possible use to

designate a different concept that was narrower than comprehensive income.


\7/  Comprehensive income also is the concept that was referred to as

    earnings in other conceptual framework documents:  Tentative

    Conclusions on Objectives of Financial Statements of Business

    Enterprises (December 1976), FASB Discussion Memorandum, Conceptual

    Framework for Financial Accounting and Reporting:  Elements of

    Financial Statements and Their Measurement (December 1976), FASB

    Exposure Draft, Objectives of Financial Reporting and Elements of

    Financial Statements of Business Enterprises (December 1977), and FASB

    Discussion Memorandum, Reporting Earnings (July 1979).


37. In Concepts Statement 5, the Board concluded that comprehensive income

and its components should be reported as part of a full set of financial

statements for a period.  The Board also described earnings as part of

comprehensive income in that Concepts Statement, indicating that earnings

was narrower than comprehensive income, and provided illustrations of

possible differences between earnings and comprehensive income.  Earnings

was described as being similar to net income in current practice, except

for cumulative effects of changes in accounting principles, which are

included in present net income but are excluded from earnings.

38. In December 1985, Concepts Statement 6 superseded Concepts Statement 3,

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