Dedication 

To our beloved Palestine, the country that made us what we are todayTo our dear families – deceased and alive – who walked us through every step of our 

lives.To our great university that gave us the opportunity to present this work.

To our dear professor who provided us with great inspiration to achieve this point of our lives. 

To our well respected colleagues who have made a very understanding brotherhood among all.

To our supportive friends who stood by our sides through everything in life and in studying.

To US , as we get this opportunity to show our thoughts today, we hope we will succeed enough in future to work and share more.

We dedicate this study …

Contents

PART 1: INTRODUCTION

objective of the study

FASB & IASB financial

statement presentation

project

PART 2: FASB – SFAS 130

Introduction to SFAS 130

comprehensive income

elements

Presenting information for comprehensive

income

Amendments to SFAS 130

Part 3: IASB -IAS 1

Introduction to IAS 1

Comprehensive Income

classifications and terms

Presentation of comprehensive

income

Amendments to IAS 1

Interaction with other projects

Part 4: conclusion

The difference and similarities between two

standards

Effects of amendments

PART 1: INTRODUCTION

• Objective of the study • FASB & IASB financial statement presentation

project

Part 1 : introduction

• The main objectives of this study is to answer these questions:– What is the FASB and IASB financial statement

presentation joint project?– What is the definition of Comprehensive Income

according to SFAS 130 and IAS 1?– How comprehensive income should be reported?– What are the main differences between SFAS 130

and IAS 1?– And what are the amendments on the standards?

Part 1 : introduction

FASB & IASB Projects:

The joint project between the IASB and the US-FASB ‘s goal is to improve the usefulness of the financial information provided in an entity’s financial statements to assist management to better communicate its financial information to the users of its financial statements, and to help users in their decision-making.

Part 1 : introduction

The IASB is conducting the project in three main phases:

Phase B (in progress)Replacement of IAS 1 and IAS 7

Addresses more fundamental issues for presentation of information in the financial statements.

PART 2: FASB – SFAS 130

• Introduction to SFAS 130• Comprehensive income elements • Presenting information for comprehensive

income• Amendments to SFAS 130

Part 2 :FASB - SFAS 130

Introduction to SFAS 130SFAS No. 130,, requires a company to report

comprehensive income and its components in a full set of financial statements.

Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Part 2 :FASB - SFAS 130

• Comprehensive income can be most easily understood if it is divided into its two major components:

Net income Other comp. income

Comprehensive income

Part 2 :FASB - SFAS 130

• SFAS No. 130 requires a company to calculate reclassification adjustments for all items of other comprehensive income except minimum pension liability adjustments.

Part 2 :FASB - SFAS 130Comprehensive income elements

Net incomeIncome from continuing

operations

Income from discontinued operations

Extraordinary items

Cumulative effects of changes in accounting principles

Part 2 :FASB - SFAS 130Comprehensive income elements

Other comp. incomeGains and losses on foreign currency

transactions

Foreign currency translation adjustments

Gains and losses on derivative instruments

Unrealized holding gains and losses on available-for-sale securities

Gains or losses associated with pension

Part 2 :FASB - SFAS 130•Changes in equity during

a period resulting from investments by owner and distributions to owners.

•Items required to be reported as direct adjustments to paid-in capital, retained earnings, or other non-income equity

Not classified

as OCI

Part 2 :FASB - SFAS 130Reporting comprehensive income• SFAS 130 does not require a specific format for

the financial statement in which comprehensive income is reported. However, it does require the display of net income as a component of comprehensive income in that statement and that the statement be displayed

Part 2 :FASB - SFAS 130

Other Comprehensive income items can be reported in

A statement of changes in equity, provided that statement is displayed as a 

primary financial statement and not 

in the notes

A separate statement of 

comprehensive income that 

begins with net income

The income statement 

below the total for net income

Part 2 :FASB - SFAS 130

• It provides flexibility as to how that information may be displayed.

• It may be reported at a gross amount or at net amount comprehensive income components may be disclosed either net of taxes or before taxes.

Part 2 :FASB - SFAS 130

• Earnings Per Share amounts are not required for total comprehensive income or its components.

• The accumulated balance of other comprehensive income items is to be reported in the equity section of the balance sheet in a category separate from contributed capital and retained earnings.

Part 2 :FASB - SFAS 130

The entity is not required to report other comprehensive income or comprehensive income if An entity that has no items of 

other comprehensive income in any period presented .

It does not specify when to recognize the items compose 

comprehensive income

An entity shall report in a continuous statement of 

comprehensive income all items that meet the definition of comprehensive income

An entity shall display both of the following in that financial statement:The net incomeThe other comprehensive income .

Amendments to SFAS 130

Part 3: IASB -IAS 1

• Introduction to IAS 1• Comprehensive Income classifications and terms 

• Presentation of comprehensive income• Amendments to IAS 1• Interaction with other projects

Part 3: IASB -IAS 1

Introduction to IAS 1• IAS 1 sets overall requirements for the presentation of

financial statements, guidelines for their structure and minimum requirements for their content.

• IAS 1 requires an entity to present, in a statement of

changes in equity, all owner changes in equity. All non-owner changes in equity (i.e. comprehensive income) are required to be presented in one statement of comprehensive income or in two statements.

Part 3: IASB -IAS 1

Comprehensive Income classifications and terms

Minimum items on the face of the statement of comprehensive income should include:

revenue finance costs share of the 

profit or loss of associates

tax expense discontinued operation profit or loss

components of other 

comprehensive income

total comprehensive 

income

Part 3: IASB -IAS 1Presentation of comprehensive income

An entity has a choice of presenting :

two statements

an income statement displaying components of profit or loss

a statement of comprehensive income that begins with profit or loss and displays components of other 

comprehensive income

single statement of comprehensive 

income

Part 3: IASB -IAS 1

• No items may be presented in the statement of comprehensive income or in the notes as 'extraordinary items'.

Part 3: IASB -IAS 1An entity shall disclose separately the following

items in the statement of comprehensive income as allocations for the period:

Non-controlling

interest

Owners of the parent

Total comprehensive income for the period

attributable to

Part 3: IASB -IAS 1

Amendments to IAS 1• The revised standard introduces “total

comprehensive income”, which represents the change in equity during a period, other than changes resulting from transactions with owners in their capacity as owners.

Part 3: IASB -IAS 1Options - Previous IAS 1  Options - revised IAS 1 

•Income statement•Statement of recognized income and expense•Equity note - other movements in equity arising from transactions with owners as owners

One statement approach•Statement of comprehensive income•Statement of changes in equity

•Income statement•Statement of changes in equity

Two statement approach•Income statement•Statement of comprehensive income•Statement of changes in equity

Part 3: IASB -IAS 1

• The proposed amendment does not change the calculation of EPS. This project does not change what is presented in profit or loss and what is presented in OCI, or how EPS is calculated. The proposed amendment simply changes the presentation of profit or loss and OCI so that they would be shown as two separate sections.

Part 3: IASB -IAS 1

• Interaction with other projects

permits an entity to make an irrevocable election to present in OCI changes in the fair value of any investment in equity instruments that is not held for trading• IFRS 9

includes proposed requirements to present in OCI re-measurements of pension plan assets and liabilities.

• IAS 19

Part 3: IASB -IAS 1

At a minimum an insurer shall for insurance company include line items in its statement of

comprehensive income that presents Underwriting margin, Claim expenses, Interest

on insurance contract liabilities, Gains and losses at initial recognition

• IFRS 4

Part 4: conclusion

• The difference and similarities between two standards

• Effects of amendments

The difference and similarities between two standards

IASBAn entity shall present its

total comprehensive income for a period either :

in a single statement of comprehensive income , or

in two statements—an income statement and a

statement of comprehensive income

FASB

comprehensive income may be presented

within the statement of changes in

shareholders’ equity.

The difference and similarities between two standards

IASB

A change from the single-statement

approach to the two-statement approach, or vice versa, is a change in

accounting policy

FASB

GAAP contains no restrictions on

changes in presentation format.

.

IASB

As a minimum, an entity shall include, in the statement of comprehensive income, 

the following amounts:*revenue    *finance costs

*share of the profit or loss of investments in associates

  *tax expense *a single amount comprising the total of 

the post-tax profit or loss of a discontinued operation

*the post-tax gain or loss recognized on the measurement to fair value 

FASB

For non-SEC registrants, GAAP includes limited guidance for items to be presented on the face of the 

income statement.  However, GAAP is generally consistent with 

IASB .

IASB

Under the single-statement approach, the statement of comprehensive income shall include all items of income and expense recognized in a 

period unless this IFRS requires otherwise .

FASB

GAAP includes additional items of OCI, such as unrealized gains and losses on available-for-sale securities and 

the tax effects of certain items .

IASB

Under the two-statement approach, the income

statement shall display, as a minimum net income and

other comprehensive income items that were showed

before The statement of

comprehensive income shall begin with profit or loss

FASB

Like IFRS, in a two-statement approach, the statement of OCI begins with net income and then displays items of OCI.  Unlike IFRS, the entity need not break out its share of OCI of equity-method investments

IASBUnder this IFRS, the effects of 

corrections of errors and changes in accounting policies are presented as retrospective adjustments of prior periods rather than as part of profit or loss in the period in which they arise

An entity shall present additional line items, headings and subtotals in the statement of comprehensive

income

FASB

Same

Same

IASBAn entity shall not

present or describe any items of income and

expense as ‘extraordinary items’ in

the statement of comprehensive income

FASB

Presentation of certain items as extraordinary is

required.

IASB

When items of income or expense are material, an entity shall disclose the amount and nature of those items either in

the statement of comprehensive income

or in the notes

FASBA material event or transaction that is

unusual in nature or occurs infrequently but

not both should be reported as a separate component of income

from continuing operations

Part 4: conclusion

•  Effects of amendments– With effect from 2009 it is expected that

accounting statements prepared under IFRS would no longer have to be reconciled with US GAAP for SEC purposes.

– Analysts would no longer have to contend with statements written in a different accounting language.

Part 4: conclusion

– There is considerably enhanced emphasis on fair presentation of financial statements and the concept of fair value and accrual basis of accounting.

– Since IFRS and US GAAP are the two most widely used standards, this project aims at bridging the gap.

Thank you…

Done by:Sarah AlianKayan AlSarraj

Produced by:Mr. Emad AbuShabaan