h. Subsequent decreases (if not an other-than-temporary impairment) or
increases in the fair value of available-for-sale securities
previously written down as impaired (Statement 115, paragraph 16).
40. Users of financial statements expressed concerns about the practice of
reporting some comprehensive income items directly within a balance shown
as a separate component of equity. Among those expressing concerns was the
Association for Investment Management and Research (AIMR). In its 1993
report, Financial Reporting in the 1990s and Beyond, the AIMR urged the
Board to implement the concept of comprehensive income for several reasons.
Two of those reasons were to discontinue the practice of taking certain
items of comprehensive income directly to equity and to provide a vehicle
for addressing future accounting issues, such as the display of unrealized
gains and losses associated with financial instruments. In that report,
the AIMR noted that it has long supported the all-inclusive income concept.
41. The Accounting Policy Committee of the Robert Morris Associates also
indicated support for what it referred to as an all-inclusive income
statement at a 1995 meeting with the Board by stating that "net income
should include the effect of all of the current period's economic
transactions and other activity of the entity."
42. There is also international precedent for moving toward an all-
inclusive income concept. In 1992, the United Kingdom Accounting Standards
Board (ASB) issued Financial Reporting Standard (FRS) 3, Reporting
Financial Performance. That standard introduced a "statement of total
recognized gains and losses" as a supplement to the "profit and loss
account," which is equivalent to the U.S. income statement. The amount for
"recognized gains and losses relating to the year" in the statement of
total recognized gains and losses is analogous to comprehensive income.
43. Largely in response to the precedent set by the ASB, other
international standard setters have focused attention on reporting
financial performance. As part of its efforts to promote international
harmonization, the Board discussed reporting comprehensive income with the
ASB as well as with standard setters from the International Accounting
Standards Committee (IASC), the Canadian Institute of Chartered
Accountants, the Australian Accounting Research Foundation, and the New
Zealand Society of Accountants.
44. In July 1996, the IASC issued an Exposure Draft, Presentation of
Financial Statements, which included a proposed requirement for a new