79. The Board considered the definition of comprehensive income in Concepts
Statement 5, which states that "comprehensive income is a broad measure of
the effects of transactions and other events on an entity, comprising all
recognized changes in equity (net assets) of the entity during a period . .
. except those resulting from investments by owners and distributions to
owners" (paragraph 39; footnote reference omitted; emphasis added).
Concepts Statement 5 further indicates that comprehensive income includes
cumulative accounting adjustments. The Board continues to support that
definition and, therefore, decided to include cumulative accounting
adjustments as part of comprehensive income.
80. The Board considered two alternatives for displaying cumulative
accounting adjustments in financial statements: (a) include cumulative
accounting adjustments in comprehensive income by displaying them as part
of other comprehensive income and (b) include cumulative accounting
adjustments in comprehensive income by continuing to display them as part
of net income.
81. The first alternative, display cumulative accounting adjustments as
part of other comprehensive income, would have allowed the Board to begin
to implement the concept of earnings as described in Concepts Statement 5,
because cumulative accounting adjustments would no longer be included in
net income. Concepts Statement 5 describes earnings as "a measure of
performance for a period and to the extent feasible excludes items that are
extraneous to that period¡items that belong primarily to other periods"
(paragraph 34, footnote reference omitted). Earnings, so defined, excludes
cumulative effects of changes in accounting principle. Nonetheless,
earnings have been included in net income since Opinion 20. As a result,
earnings is similar to, but not necessarily the same as, net income in
82. The Board committed at the outset to limit the project's scope to
display of comprehensive income. The Board's decision to continue to
display cumulative accounting adjustments as part of net income resulted
more from adherence to that scope commitment than to the merits of the
arguments for either alternative.
Display of Components of Comprehensive Income
83. The Board considered two issues related to the display of components of
comprehensive income: (a) whether comprehensive income should be divided
into two broad display classifications, net income and other comprehensive