Companies report all amounts related to other comprehensive income net of tax. Net of tax means that the amount of income (or loss) reported includes any income tax effects. Companies do not include the income tax expense (or benefit) related to items included in other comprehensive income in the income tax expense line item reported on the statement of income immediately following the net income before income tax line item.
Read paragraphs BC14 and BC15 of ASU 2011-05 -Presentation of Comprehensive Income and answer the following questions.
1. What are the requirements related to the presentation of the gross amounts, the net of tax amounts, and the tax impact of items include in OCl?
2. Did respondents to the exposure draft agree with this approach? Did any respondents disagree? If so, what were their concerns?
3. Why did the board make the decision that it did?