FASB Seeks Comments on Proposal to Defer Changes to Presentation of Reclassification of Other Comprehensive Income on Financial Statements

Norwalk, CT, November 8, 2011—The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update to defer the specific requirement to present items that are reclassified out of accumulated other comprehensive income to net income alongside their respective components of net income and other comprehensive income. Comments on the proposed deferral are requested by November 23, 2011.

Earlier this year, the FASB issued Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The Update was intended to increase the prominence of other comprehensive income in financial statements, and help financial statement users better understand the cause of a company’s change in financial position and results of operations. Stakeholders, however, raised concerns that new presentation requirements about the reclassification of items out of accumulated other comprehensive income would be costly for preparers and add unnecessary complexity to financial statements. As a result of these concerns, the Board decided to reconsider whether it is necessary to require public companies, private companies, and not-for-profit organizations to present reclassification adjustments by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. The Board is not proposing to defer the requirement to report comprehensive income either in a single continuous statement or in two separate but consecutive financial statements.

To defer only those changes in Update 2011-05 that related to the presentation of reclassification adjustments, the amendments in this proposed Update would supersede only those paragraphs that pertain to how and where reclassification adjustments are presented. While the Board is considering the operational concerns about the presentation requirements for classification adjustments, entities would continue to report reclassifications out of accumulated comprehensive income consistent with the presentation requirements in effect before Update 2011-05.

The proposed amendments would be effective at the same time as the amendments in Update 2011-05. Therefore, the amendments in this proposed Update would be effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2011. For nonpublic companies and not-for-profit organizations, the amendments in this proposed Update would be effective for fiscal years ending after December 15, 2012, and interim and annual periods thereafter.

The proposed Update is available at

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Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at