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Statement of Financial Accounting Standards No. 130 - page 3 / 57





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3.   Although the Board generally followed the all-inclusive income

concept, occasionally it made specific exceptions to that concept by

requiring that certain changes in assets and liabilities not be reported in

a statement that reports results of operations for the period in which they

are recognized but instead be included in balances within a separate

component of equity in a statement of financial position.  Statements that

contain those exceptions are FASB Statements No. 12, Accounting for Certain

Marketable Securities,\2/ No. 52, Foreign Currency Translation, No. 80,

Accounting for Futures Contracts, No. 87, Employers' Accounting for

Pensions, and No. 115, Accounting for Certain Investments in Debt and

Equity Securities.


\2/  Statement 12 was superseded by Statement 115.


4.   Some users of financial statement information expressed concerns about

the increasing number of comprehensive income items that bypass the income

statement. Currently, an enterprise is required to report the accumulated

balances of those items in equity.  However, because of the considerable

diversity as to how those balances and changes in them are presented in

financial statements, some of those users urged the Board to implement the

concept of comprehensive income that was introduced in FASB Concepts

Statement No. 3, Elements of Financial Statements of Business Enterprises

(which was superseded by FASB Concepts Statement No. 6, Elements of

Financial Statements), and further described in FASB Concepts Statement No.

5, Recognition and Measurement in Financial Statements of Business


5.   As a first step in implementing the concept of comprehensive income,

this Statement requires that all items that meet the definition of

components of comprehensive income be reported in a financial statement for

the period in which they are recognized.  In doing so, this Statement

amends Statements 52, 80, 87, and 115 to require that changes in the

balances of items that under those Statements are reported directly in a

separate component of equity in a statement of financial position be

reported in a financial statement that is displayed as prominently as other

financial statements.  Items required by accounting standards to be

reported as direct adjustments to paid-in capital, retained earnings, or

other nonincome equity accounts are not to be included as components of

comprehensive income.  (Refer to paragraphs 108-119.)

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