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Statement of Financial Accounting Standards No. 130 - page 18 / 57





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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

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