Question

1. What is the difference between Comprehensive Income and Other Comprehensive Income? (include where in the financial statements they are found).
2. Describe the difference between Comprehensive Income and Net Income?
3. What ASC (s) contain significant guidance for Comprehensive Income and Other Comprehensive Income?
4. List at least 5 types of items that belong in Comprehensive Income and Other Comprehensive Income.
5. OCI is presented net of tax—show me an example of how the taxes impact the amount shown and state why “net of tax” makes sense.
6. What are the components of a complete set of financial statements (use their complete, proper names).
7. How would you describe the difference between an annual report and a complete set of financial statements?
8. How many periods should be shown in a complete set of financial statements? Is there a difference between the financial statements (as in one financial statement might require a different number of periods than a different financial statement).
9. What is the complete definition for determining whether an asset or liability should be classified as current or non-current (time period and exception)? Think back to Principles I or Intermediate I.
10. What is the difference in appearance/approach for the indirect method and the direct method of creating a cash flow statement? What sections of the cash flow statement differ between the two methods?
11. In ASC 230-10-50, it states “information about all investing and financing activities of an entity during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period shall be disclosed. Those disclosures may be either narrative or summarized in a schedule, and they shall clearly relate the cash and noncash aspects of transactions involving similar items.” Give at least 2 examples of non-cash events that may need to be disclosed on the cash flow statement.

Answer 1

As there are too many questions, I will be answering first four questions.

1. Comprehensive Income is  shown as part of shareholder equity in balance sheet. Other comprehensive income on the other hand has a different section where it is specified. It does not forms part of income statement. Comprehensive income is an umbrella term whereas other comprehensive income is more specific. Comprehensive Income is income from regular operations of business like providing specific product or service. Other comprehensive income is income which does not occur from regular operations of business like unrealised gains or losses.

2. Comprehensive income is much wider term, net income is more specific. Comprehensive Income includes net income and unrealised income. Comprehensive income is equal to net income plus other comprehensive income.

3. Accounting Standards Codification (ASC) 220, Comprehensive Income, consists of one topic: ASC 220‐10, Overall, which provides guidance on the reporting, presentation, and disclosure of comprehensive income.

4.

Items for Other Comprehensive income are:

• Unrealized gain or loss for debt instruments.
• Unrealized gain or loss on investments that are available for sale.
• Translation gains or loss on foreign currency.
• Gain or losses on pension plans.

Items for Comprehensive income are:

Income from sales of products

income from sale of services

interest income

income from credit to suppliers