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FASB Accounting Standards Codification

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FASB Accounting Standards Codification
Certified Public Accountants (CPAs) have for some time now been made aware of the
complexities of financial reporting due to FASB accounting standards codification in the US
GAAP. This is particularly with respect to reporting comprehensive income. The main aim of
doing this is to ensure ease in understanding and interpretation of these financial statements.
Despite what one might initially think, codification makes no alteration whatsoever to the
already existing US GAAP. As a result, codification reduces instances of non-compliance as the
accounting standards are easily understandable. It also plays a vital role in the process of
international convergence of accounting standards.
Comprehensive income is a more extensive classification of income than the traditional
income. It can be defined as the total change in equity for a reporting period other than
transactions with owners. Unrealized gains/losses in securities, pension liabilities and foreign
currency items are some of the things that form comprehensive income. Comprehensive income
does indeed differ from normal periodic income. One point to start from while examining this
difference is the realization of gains and losses that had not previously been included in the
income statement. Despite the differences between the two, both must be prepared and reported

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