Wiley GAAP: Financial Statement Disclosure Manual. Joanne M. Flood
These AOCI components are components of net periodic pension cost (see pension note for additional details).
If the “gross” approach illustrated above is used, it is also necessary to present in the notes to the financial statements details regarding the allocation of the tax effects to the several items included in other comprehensive income. An example of that note disclosure follows.
Example 5.6: Two Separate but Consecutive Statements of Income and Comprehensive Income—Net of Tax Presentation
| Hypothetical Corporation Statement of Income for the Year Ended December 31, 20X1 ($000 omitted) | |
| Revenues, (includes $12,000 accumulated other comprehensive income reclassifications for net gains in cash flow hedges) | $395,400 |
| Expenses, (includes ($10,000) accumulated other comprehensive income reclassifications for net loss in cash flow hedges) | (251,220) |
| Other gains and losses | 1,500 |
| Income from operations before tax | 145,680 |
| Income tax expense | (62,430) |
| Net income | 83,250 |
| Earnings per share | |
| Basic and diluted 0.73 | |
| Hypothetical Corporation Statement of Comprehensive Income for the Year Ended December 31, 20X1 ($000 omitted) | ||
| Net income | 83,250 | |
| Other comprehensive income | ||
| Foreign currency translation adjustment, net of $5,100 tax | 11,900 | |
| Unrealized gain on debt securities: | ||
| Unrealized holding gains arising during period, net of $7,500 tax | 17,500 | |
| Less: Reclassification adjustment, net of $1,500 tax, for gain included currently in net income | (3,500) | 14,000 |
| Cash flow hedges | ||
| Net derivative losses arising during the period, net of $4,800 tax | (11,200) | |
| Less: Reclassification adjustment for losses included currently in net income, net of $7,762 tax | 18,113 | 6,913 |
| Defined benefit pension plans: tax10 | ||
| Prior service cost arising during period | (3,900) (a) | |
| Net loss arising during period | (2,900) (a) | |
| Less: Amortization of prior service cost included with net period pension cost | 300 (a) | |
| Less: Tax effects | 1,950 | (4,550) |
| Other comprehensive income | 28,263 | |
| Comprehensive income | $111,513 | |
| (a) These AOCI components are components of net periodic pension cost (see pension note for additional details). | ||
Example 5.7: Note X: Income Taxes
The tax effects of items included in other comprehensive income for the year ended December 31, 20X1, are as follows:
| Before‐Tax Amount | Tax Expense (Benefit) | Net‐of‐Tax Amount | |
| Foreign currency translation adjustments | $17,000 | $5,100 | $11,900 |
| Unrealized gains on debt securities: | |||
| Unrealized holding gains arising during period | 25,000 | 7,500 | 17,500 |
| Less: Reclassification adjustment for gains |