Document Type


Department or Administrative Unit


Publication Date



The Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 130 Reporting Comprehensive Income, in June 1997, effective for fiscal periods beginning after December 15, 1997. Early trends in reporting comprehensive income and its components for the Fortune 500 reveal an overwhelming preference for disclosure in the statement of changes in stockholders' equity, despite the FASB's recommendation of utilizing a combined statement of income/comprehensive income or a separate statement of comprehensive income. This disclosure tends to downplay the importance of other comprehensive income items and focus readers' attention on the traditional net income figure rather than comprehensive income. Data from the Fortune 500 show that OCI items can indeed be volatile and significant, increasing in impact from a -1.9% of net income in 1999 to -30.9% of net income in 2001. The most significant component of OCI was the foreign currency translation adjustment, which was negative in each year examined. Perhaps it is time for the FASB to reconsider the reporting flexibility afforded companies under SFAS No. 130. Requiring the OCI items to be disclosed in a combined statement of income and comprehensive income or in a separate statement of comprehensive income would allow these volatile and potentially significant items to be evaluated more directly by users of statements.


This article was originally published in Academy of Accounting and Financial Studies Journal. The full-text article from the publisher can be found here.


Academy of Accounting and Financial Studies Journal

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.