Other comprehensive income: A consistent approach would improve information for investors

August 2012
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Other comprehensive income  A consistent approach would improve information for investors

At a glance

This publication highlights the importance of this issue, provides our preliminary thoughts, and encourages further dialogue and standard setting action by both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB).

Highlights

  • Certain performance measures, such as earnings per share, net income, and income before taxes, are important to investors. More consistency is needed to define when items should be excluded from these measures and recognized in other comprehensive income.
  • Items excluded from net income should be minimized. Only certain re-measurements caused by market movements that are not useful for investors to assess company performance should be excluded.
  • Standard setters should engage investors to understand their views about information that should be excluded from net income.
  • Items initially excluded from net income should be reclassified to net income when the reason for their exclusion no longer exists.