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Wiley GAAP: Financial Statement Disclosure Manual. Joanne M. Flood
Читать онлайн.Название Wiley GAAP: Financial Statement Disclosure Manual
Год выпуска 0
isbn 9781119365723
Автор произведения Joanne M. Flood
Жанр Бухучет, налогообложение, аудит
Издательство John Wiley & Sons Limited
5 Other revenues and expenses
6 Unusual and/or infrequently occurring
7 Goodwill impairment losses
8 Exit or disposal activity costs
9 Income tax expense
Net Income The section ends in a subtotal that varies depending upon the existence of discontinued operations. Net income reflects all items of profit and loss recognized during the period, except for error corrections. (ASC 220‐10‐45‐7A) The requirement that net income be presented as one amount does not apply to those entities that have statements different in format from commercial enterprises:
Investment companies.
Insurance entities.
Certain not‐for‐profit entities (NFPs).
(ASC 220‐10‐45‐7A)
Items of Other Comprehensive Income ASC 220‐10‐45‐10A lists the following as items currently within other comprehensive income:
Foreign currency translation adjustments (see paragraph 830‐30‐45‐12).
Gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity, commencing as of the designation date (see paragraph 830‐20‐35‐3(a)).
Gains and losses on intra‐entity foreign currency transactions that are of a long‐term investment nature (that is, settlement is not planned or anticipated in the foreseeable future), when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting entity's financial statements (see paragraph 830‐20‐35‐3(b)).
The difference between changes in fair value of the excluded components of derivatives designated in qualifying hedges and the initial value of the excluded components recognized in earnings under a systematic and rational method.2
Gains and losses (effective portion) on derivative instruments that are designated as, and qualify as, cash flow hedges (see paragraph 815‐20‐35‐1(c)).
For derivatives that are designated in qualifying hedging relationships, the difference between changes in fair value of the excluded components and the initial value of the excluded components recognized in earnings under a systematic and rational method in accordance with ASC 815‐20‐25‐83A.
Unrealized holding gains and losses on available‐for‐sale debt securities (see paragraph 320‐10‐45‐1).3
Unrealized holding gains and losses that result from a debt security being transferred into the available‐for‐sale category from the held‐to‐maturity category (see paragraph 320‐10‐35‐10(c)).
Amounts recognized in other comprehensive income for debt securities classified as available‐for‐sale and held‐to‐maturity related to an other‐than‐temporary impairment recognized in accordance with Section 320‐10‐35 if a portion of the impairment was not recognized in earnings.4
Subsequent decreases (if not an other‐than‐temporary impairment) or increases in the fair value of available‐for‐sale securities previously written down as impaired (see paragraph 320‐10‐35‐18).5
Gains or losses associated with pension or other postretirement benefits (that are not recognized immediately as a component of net periodic benefit cost) (see paragraph 715‐20‐50‐1(j)).
Prior service costs or credits associated with pension or other postretirement benefits (see paragraph 715‐20‐50‐1(j)).
Transition assets or obligations associated with pension or other postretirement benefits (that are not recognized immediately as a component of net periodic benefit cost) (see paragraph 715‐20‐50‐1(j)).
Changes in fair value attributable to instrument‐specific credit risk of liabilities for which the fair value option is elected (see paragraph 825‐10‐45‐5).
Effects of changes in the discount rates used to measure traditional and limited‐payment long‐duration contracts6 (see ASC 944‐40‐35‐6A(b)(1)).
Effects of changes in the fair value of a market risk benefit attributable to a change in the instrument‐specific credit risk7 (see ASC 944‐40‐35‐6A(b)(1)).
The following items do not quality as comprehensive income:
Changes in equity resulting from investment by and distributions to owners.
Items that are required to be reported as direct adjustments to paid‐in‐capital, retained earnings, or other nonincome equity accounts.(ASC 220‐10‐45‐10B)
Other comprehensive income is recognized and measured in accordance with the accounting pronouncement that deems it part of other comprehensive income.
Income Tax Effects The items of other comprehensive income can be reported either:
Net of related tax effects in the statement, or
Gross with the tax effects related to all components reported on a single, separate line.(ASC 220‐10‐45‐11)
The tax effects of each component of other comprehensive income must be presented in the statement in which those components are presented or in the notes of the financial statements. (ASC 220‐10‐45‐12 and 50‐4) If gross reporting is used, the notes to the financial statements must disclose the tax effects related to each component (if there is more than one component). Examples 5.5 and 5.6 later in this chapter illustrate the two presentations.
The Codification also has guidance on the reclassification of certain tax effects from AOCI. The guidance is intended to help entities address certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the Tax Cuts and Jobs Act. Under the guidance, entities have an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. If the entity elects to reclassify the income tax effects of the Tax Cuts and Jobs Act from AOCI to retained earnings, the reclassification includes:
1 The effects of the change in the U.S. federal corporate income tax rate as the gross defined tax amounts and related valuation allowances.
2 Other income tax effects that the entity elects to reclassify.(ASC 220‐10‐45‐12A)
The guidance recommends financial statement preparers disclose:
A description of the accounting policy for releasing income tax effects from AOCI.
Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act, and information about the other income tax effects that are reclassified. If the preparers elect not to reclassify the effects, they must disclose that fact in the period of adoption.(ASC 220‐10‐50‐1 through 50‐3)The guidance affects any organization thatIs required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, andHas items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required