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4.4 Presenting comprehensive income
Publication date: 12 Nov 2019
us Financial statement presentation guide
ASC 220 provides a definition of comprehensive income.
Definition from ASC 220-10-20
Comprehensive income: The change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Comprehensive income comprises both of the following:
- All components of net income
- All components of other comprehensive income.
Comprehensive income may be presented in a single statement or in two consecutive statements. Proponents of the single statement prefer its simplicity, while proponents of the two-statement format cite as a benefit the increased prominence of the "primary" performance measures of net income and earnings per share.
Total comprehensive income per share should not be disclosed on the face of the financial statements. See FSP 7.3.3.
Figure FSP 4-1 illustrates the reporting requirements of each format.
Figure FSP 4-1
Formats for the presentation of comprehensive income
Formats for the presentation of comprehensive income
Format
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Presentation
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Single statement
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Two consecutive statements
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Question FSP 4-1 addresses whether a change in format for the presentation of comprehensive income is a change in accounting principle.
Question FSP 4-1
Is a change from a single statement of comprehensive income to the two-statement format (or vice versa) considered a change in accounting principle?
Is a change from a single statement of comprehensive income to the two-statement format (or vice versa) considered a change in accounting principle?
PwC response
No. We do not believe a change in the format of presentation of comprehensive income would be considered a change in accounting principle as both formats present the same information and are permitted under ASC 220. As such, there would be no need to demonstrate the preferability of one format over the other.
Question FSP 4-2 addresses whether an entity may use one format for the presentation of comprehensive income for interim reporting and another format for annual reporting.
Question FSP 4-2
Is it possible to use a single statement format for interim reporting and a two-statement format for annual reporting?
Is it possible to use a single statement format for interim reporting and a two-statement format for annual reporting?
PwC response
Yes. Some reporting entities elect to provide the minimum information required for interim reporting and only present total comprehensive income in a single statement format. However, because of the additional annual reporting requirements, an entity may prefer to use a two statement format at year end. Because both formats provide the same information, there is no requirement to use the same format in interim and annual periods.
4.4.1 Presenting comprehensive income attributable to noncontrolling interest
A reporting entity is required by ASC 220-10-45-5 to separately present net income and comprehensive income attributable to its parent and any noncontrolling interest (NCI) on the face of the financial statements. This would include the statement of comprehensive income and statement of income (if presented as two separate statements).
4.4.2 Sample single statement of comprehensive income
Figure FSP 4-2 illustrates the presentation of comprehensive income in a single statement.
As discussed in ASC 220-10-45-14A through ASC 220-10-45-17B, reporting entities are permitted to present reclassifications from AOCI either on the face of the statement of comprehensive income or within the footnotes. See FSP 4.5 for further information. Figure FSP 4-2 presents the "net changes" for each component of OCI as depicted in ASC 220-10-55-7 and ASC 220-10-55-8 assuming reclassifications are disclosed elsewhere. Comparative statements are not shown for simplicity. See Figure FSP 4-3 for example statements that reflect reclassifications from AOCI.
Figure FSP 4-2
Sample consolidated single statement of comprehensive income
Sample consolidated single statement of comprehensive income
FSP Corp
Consolidated Statement of Comprehensive Income Year ended December 31, 20X7 In millions $, except per share data |
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Revenues
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$1,400
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Costs of goods sold
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(500)
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Selling, general and administrative
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(20)
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Gain on sale of securities
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340
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Income before tax
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1,220
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Income tax expense
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(320)
|
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Equity in earnings of unconsolidated investee, after tax
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100
|
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Net income
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$1,000
|
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Less: net income attributable to the noncontrolling interest
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(100)
|
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Net income attributable to FSP Corp stockholders
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$900
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Earnings per share
|
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Basic and diluted
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$1.25
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Other comprehensive loss, net of tax:
|
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Change in foreign currency translation adjustments
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80
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Change in unrealized gains related to available-for-sale debt securities
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11
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Equity in unrealized losses on available-for-sale debt securities of unconsolidated investee
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(8)
|
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Change in unrealized gains on cash flow hedges
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15
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Change in prior service cost and unrecognized loss for defined benefit pension plans
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(150)
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Change in fair value attributable to instrument-specific credit risk of liabilities measured at fair value under the fair value option
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5
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Other comprehensive loss
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(47)
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Comprehensive income
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$953
|
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Less: comprehensive income attributable to the noncontrolling interest
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(220)
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Comprehensive income attributable to FSP Corp stockholders
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$733
|
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4.4.3 Sample statement of comprehensive income (that follows the income statement)
A separate statement of comprehensive income should begin with net income attributable to the consolidated reporting entity. If a reporting entity has NCI, net income before NCI would be the starting point for a separate statement of comprehensive income.
Figure FSP 4-3 illustrates the consolidated statement of comprehensive income, which would follow the consolidated statement of income. For simplicity, the statement of income is not included, and comparative statements are not shown.
As discussed in ASC 220-10-45-14A through ASC 220-10-45-17B, reporting entities can present reclassifications from AOCI either on the face of the statement of comprehensive income or within the footnotes. See FSP 4.5 for further information. Figure FSP 4-3 segregates the reclassifications out of AOCI from other changes relative to that component of OCI. Refer to ASC 220-10-55-9 for an additional illustration. See Figure FSP 4-2 for an illustration of a net presentation of OCI and AOCI in the statement of comprehensive income.
Figure FSP 4-3
Sample consolidated statement of comprehensive income (that would follow the consolidated statement of income)
Sample consolidated statement of comprehensive income (that would follow the consolidated statement of income)
FSP Corp
Consolidated Statement of Comprehensive Income Year ended December 31, 20X7 In millions $ |
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Net income
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$1,000
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Other comprehensive loss, net of tax:
|
||||
Change in foreign currency translation adjustments
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80
|
|||
Net changes related to available-for-sale debt securities:
|
||||
Unrealized gains during period
|
13
|
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Reclassifications of losses to net income
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(2)
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11
|
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Equity in unrealized losses on available-for-sale debt securities of unconsolidated investee
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(8)
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Change in unrealized gains/losses on cash flow hedges:
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Unrealized gains during period
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43
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Reclassifications of losses to net income
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(28)
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15
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Change in fair value attributable to instrument-specific credit risk of liabilities measured at fair value under the fair value option
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5
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Changes in defined benefit pension plans:
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Prior service cost arising during period
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(160)
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Net loss arising during period
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(10)
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Less: amortization of prior service cost included in net periodic pension cost
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20
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(150)
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Other comprehensive loss
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(47)
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Comprehensive income
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$953
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Less: comprehensive income attributable to the noncontrolling interest
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(220)
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Comprehensive income attributable to FSP Corp stockholders
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$733
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1 Represents net income of $1,000 less other comprehensive loss of $47.
2 ASC 220-10-45-5 requires presentation of comprehensive income attributable to NCI on the face of the financial statements.
3 Represents net income attributable to NCI of $100 plus OCI attributable to NCI of $120.
4 Represents net income attributable to NCI of $100 plus OCI attributable to NCI of $120.
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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