Comprehensive income reporting: FASB decides location matters

It is often said that the three most important qualities in real estate are "location, location, location." Now it seems the same may be said for comprehensive income reporting. On Jun 16, 2011, FASB issued Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income. This new accounting standard requires that all companies report comprehensive income in an income statement-type location. Prior to ASU 2011-05, companies had the option of reporting comprehensive income in the statement of changes in equity. While some companies' reporting already complies with the new standard, most public companies will have to significantly change where they report comprehensive income. FASB has long argued that other comprehensive income is best reported as part of total comprehensive income in an income statement -- type format, rather than as part of the statement of changes in equity. FASB claims that this preferred reporting location provides greater transparency, comparability, and consistency.