Titan Networking became a public company through an IPO (initial public offering) two weeks ago. You are looking forward to the challenges of being assistant controller for a publicly owned corporation. One such challenge came in the form of a memo in this morning's in-box. "We need to start reporting comprehensive income in our financials," the message from your boss said. "Do some research on that, will you? That concept didn't exist when I went to school." In response, you sought out the financial statements of Cisco Systems, the networking industry leader. The following are excerpts from disclosure notes from Cisco's 2015 annual report:

Required:
1. Locate the financial statements of Cisco at www.sec.gov or Cisco's website. Search the 2015 annual report for information about how Cisco accounts for comprehensive income. What does Cisco report in its balance sheet regarding comprehensive income?
2. Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Identify the specific citation from the authoritative literature that describes the two alternative formats for reporting comprehensive income.
3. What is comprehensive income? How does it differ from net income? Where is it reported in a balance sheet?
4. One component of Other comprehensive income for Cisco is "net unrealized gains on investments." What does this mean? From the information Cisco's financial statements provide, determine how the company calculated the $61 million accumulated other comprehensive income at the end of fiscal 2015.
5. What might be possible causes for the "Other" component of Cisco's Other comprehensive income?

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July 25, 2015 $8,981 Years Ended July 26, 2014 $7,853 July 27, 2013 $9,983 Net income Other comprehensive income (loss) Available-for-sale investments: Change Net gains reclassified into earnings, net of tax (12) (100) (112) in net unrealized gains, net of tax 233 (189) (31) (37) Cash flow hedging instruments: 48 (68) (20) 73 (12) 61 Change in unrealized gains and losses, net oftax (158) 154 Net (gains) losses reclassified into eanings Net change in cumulative translation adjustment and actuarial gains and losses, net of tax Other comprehensive income (loss) (498) (614) $8,367 (84) (60) 9,923 68 Comprehensive income $7,921