Question

Which of the following is not an acceptable way of displaying the components of other comprehensive income?

a. Displaying each component in a separate line item
b. Displaying the total of all components in a single line item
c. Presenting the components in a separate statement
d. Displaying the components as part of the income statement
e. Reporting the components in the statement of changes in equity

Answer 1

The components of other comprehensive income should not be displayed as part of the income statement.

Step-by-step explanation:

The correct answer is d. Displaying the components as part of the income statement.

The components of other comprehensive income are typically reported in a separate statement called the statement of other comprehensive income or as part of the statement of changes in equity. This allows users of financial statements to easily identify and understand the different components of other comprehensive income, which may include items such as unrealized gains and losses on investments, foreign currency translation adjustments, and actuarial gains and losses on pension plans.

Displaying the components of other comprehensive income as part of the income statement itself may not provide adequate visibility and clarity for users of financial statements, as it can get mixed with other income and expenses. Therefore, option d is not an acceptable way of displaying the components of other comprehensive income.