To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. Access the FASB’s Web site at www.fasb.org. Click on “Pronouncements & EITF Abstracts.” In the chapter, we discussed the statement of comprehensive income. For this case, we will use Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income.” Open FAS No. 130.
1. Read paragraph 15. Is comprehensive income intended to replace net income?
2. Read paragraph 22. Is a separate statement of comprehensive income required to be provided by companies?
3. Read paragraph 26. Net income is closed to Retained Earnings on the balance sheet. Where is other comprehensive income closed at the end of a period?