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FASB Votes to Defer Portions of OCI Standard

Published on: 21 Oct 2011

Today, the FASB met to discuss whether to defer some or all of the provisions of ASU 2011-05.1 Issued earlier this year, the ASU revises the manner in which entities present comprehensive income in their financial statements. Constituents have raised questions about the operationality of a provision that requires adjustments for items that are reclassified from other comprehensive income (OCI) to net income to be presented in both net income and OCI.

Accordingly, by unanimous vote, the Board tentatively decided to indefinitely defer the ASU’s provisions related to the presentation of reclassification adjustments so that it could appropriately review and evaluate constituents’ concerns. The effective date for unaffected provisions (i.e., the requirement to report the components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements) would remain unchanged. For public entities, this effective date is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. Nonpublic entities are required to apply the provisions for annual periods ending after December 15, 2012, and interim and annual periods thereafter.

The FASB also tentatively decided today that during the deferral period, entities would be required to comply with all existing requirements for reclassification adjustments in ASC 220.2 ASC 220-10-45-17 currently states that “an entity may display reclassification adjustments on the face of the financial statement in which comprehensive income is reported, or it may disclose reclassification adjustments in the notes to the financial statements.”

The FASB is expected to issue a proposed ASU on today’s tentative decisions in November.


[1] FASB Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income.

[2] FASB Accounting Standards Codification (ASC) Topic 220, Comprehensive Income.

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