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F1 M7 Statement of Comprehensive Income, Comprehensive Income (OCI (PUFER)…
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Comprehensive Income
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Comprehensive Income are nonowner equity
which is all equity but investment and distributions from owners. It is made up of Net Income and Other Comprehensive Income.
Net Income includes continuing operations and discontinuing operations, just no extraordinary items as that goes to R/E.
Other Comprehensive Income are REGL excluded from Net Income and goes to Accumulated OCI on the B/S.
Other OCI must be classified by the item's nature which is remembered by PUFER.
Pension adjustment, Unrealized GL on AFS Debt, Foreign Currency Items, Effective Portion of Cash Flow Hedges, Revaluation Surplus. Note Revaluation Surplus is only for IFRS)
To avoid double accounting OCI is closed into Accumulated OCI on the B/S at the end of every period just like how NI gets closed into R/E.
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Pension Adjustments
GAAP vs IFRS
GAAP
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All gain or losses, prior service costs, transition assets or obligations go to OCI and can be recognized as net periodic benefit costs later
IFRS
Certain actuarial gain and losses may be included in OCI, but it can't be reclassified into net income later
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Pension adjustments are changes to the pension status due to gains or losses, prior service costs, transition assets or obligations.
Under GAAP, pension adjustments can later be recognized as net periodic benefit costs.
However, under IFRS, once included in OCI it can't be reclassified into net income later.
Foreign Currency Items
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Remeasurement and Transactions are included in Net Income, not OCI
Other Reporting Issues
OCI Income Taxes
It can be reported
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or Before tax with a separate total tax line for all OCI taxes either in the face of the I/S or in the notes
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Interim period reporting
Total for comprehensive income shall be reported, whole statement not required
Some reporting issues include disclosures either in the face or in the footnotes.
Interim periods must disclose that total comprehensive income. Taxes can be reported net of tax or before tax as long as the tax effects of each OCI items are disclosed.
In addition, the changes of AOCI balance of each OCI must be disclosed. The AOCI disclosure must show the reclassification adjustment of current period OCI to not double count something.
AOCI Beg Bal + Net current Period OCI = AOCI End balance.
The total AOCI must be reported on the B/S as an equity item.
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