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Accounting Issue Outline

In: Business and Management

Submitted By coolie57
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Accounting Issue: Financial Reporting * Comprehensive Income * Issued to address the presentation of certain items that bypass the income statement and were recorded directly to equity * Focused on net income would not take into account comprehensive income items in measuring financial performance * Bypassed the incomes statement: recorded directly to stockholder’s equity * Foreign currency matters * Derivatives and hedging * Compensation –Retirement benefits. * Prior to ASC 220 entities were required to present only the accumulated balances in the statement of stockholder’s equity. To date, ASC 220 has required that comprehensive income be presented in financial statements. * ASC 220 must be reported one of three ways * Present separate statement of comprehensive income. * Combine statement of income & comprehensive income * Present comprehensive income as a section within the statement of stockholder’s equity. * GAAP vs IFRS * GAAP * Does not require a consecutive presentation of statement of income and comprehensive income. * Presents three alternatives of presenting comprehensive income * Separate statement * Combined statement with income statement * As part of the statement of changes in stockholders equity * IFRS * Presents two alternatives of presenting comprehensive income * Separate statement * Combined statement with income statement * Requires consecutive presentation of statement of income and comprehensive income. * According to FASB removing certain presentations options will make it easier to compare comprehensive income used within GAAP vs IFRS. * Key Changes * Reclassification…...

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