ASBJ 25
Accounting Standard for Presentation of Comprehensive Income
Accounting Standard for Presentation of Comprehensive Income is part of the Japan GAAP framework.
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Conceptual Framework Linkage
Introducing a genuinely new concept to Japanese financial reporting
BEFORE ASBJ Statement No. 25, J-GAAP had NO "comprehensive income" concept AT ALL – unrealised gains/losses on securities, foreign currency translation adjustments, and similar items simply moved DIRECTLY within the Net Assets section's Valuation and Translation Adjustments component, WITHOUT ever being COMBINED with net profit into a SINGLE, presented total. This Statement introduced "COMPREHENSIVE INCOME" (包括利益) as a GENUINE new presentation concept – REQUIRING a combined figure showing net profit PLUS all "OTHER COMPREHENSIVE INCOME" movements for the period.
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Scope – Consolidated Financial Statements Only
A requirement that applies only at the group reporting level
This Statement applies ONLY to CONSOLIDATED financial statements – companies preparing consolidated statements must present COMPREHENSIVE INCOME; companies' OWN INDIVIDUAL (non-consolidated) financial statements are NOT required to present a comprehensive income figure or statement (Section 6).
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Comprehensive Income Defined – Net Profit Plus Other Comprehensive Income
A single combined figure capturing the full period movement
COMPREHENSIVE INCOME = NET PROFIT (or loss) for the period PLUS "OTHER COMPREHENSIVE INCOME" (その他の包括利益, OCI) – the period's movement in items that PREVIOUSLY moved DIRECTLY within Net Assets' Valuation and Translation Adjustments component WITHOUT passing through a comprehensive income TOTAL. Together, these give a FULLER picture of the TOTAL change in a shareholder's economic position DURING the period, beyond just the traditional "bottom line" net profit figure.
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Components of Other Comprehensive Income
The same underlying items previously tracked only within Net Assets
OCI component Source
Unrealised gains/losses on Available-for-Sale securitiesASBJ Statement No. 10 (Financial Instruments)
Deferred hedge gains/lossesASBJ Statement No. 10 (Financial Instruments)
Foreign currency translation adjustmentsConsolidation of foreign subsidiaries
Remeasurements of Defined Benefit PlansASBJ Statement No. 19 / No. 26 (Retirement Benefits)
Share of OCI of equity-method affiliatesASBJ Statement No. 16 (Equity Method)
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Presentation Format – Single Statement or Two Consecutive Statements
Two acceptable formats, broadly mirroring IAS 1
A company may present comprehensive income EITHER as a SINGLE, CONTINUOUS statement (starting with revenue, working down to net profit, then ADDING other comprehensive income items to arrive at TOTAL comprehensive income) OR as TWO SEPARATE but CONSECUTIVE statements (a Statement of Income arriving at net profit, IMMEDIATELY followed by a separate Statement of Comprehensive Income starting from that net profit figure) – broadly MIRRORING IAS 1's OWN single-statement/two-statement presentation choice internationally.
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A RECURRING J-GAAP THEME – Individual Statements Have No Comprehensive Income Figure
The same consolidated/individual dual-track pattern seen elsewhere in J-GAAP
This Statement's LIMITATION to CONSOLIDATED financial statements ONLY is a RECURRING structural theme seen ELSEWHERE in J-GAAP – most notably in retirement benefit accounting (see the companion ASBJ Statement No. 19 poster, where CONSOLIDATED statements recognise actuarial remeasurements IMMEDIATELY while INDIVIDUAL statements continue GRADUAL amortisation). An entity's OWN individual (non-consolidated) financial statements CONTINUE to present Net Assets movements WITHOUT a combined comprehensive income TOTAL – illustrating a genuinely DISTINCTIVE, recurring J-GAAP PATTERN of applying MORE internationally-aligned treatment at the CONSOLIDATED level while RETAINING more traditional, less internationally-aligned treatment at the INDIVIDUAL statement level.
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Recycling – Reclassification to Profit or Loss
Most OCI components are eventually reclassified through profit or loss
MOST other comprehensive income components are SUBSEQUENTLY "RECYCLED" (reclassified) to the Statement of Income upon a TRIGGERING event – for example, unrealised gains on Available-for-Sale securities are recycled upon SALE of the security, and foreign currency translation adjustments are recycled upon DISPOSAL of the foreign subsidiary – ensuring these amounts EVENTUALLY flow through profit or loss, just at a DIFFERENT (later) point in time than immediate recognition would have.
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Worked Example – Calculating Total Comprehensive Income
Combining net profit with the period's OCI movements
Example: A consolidated group's comprehensive income for the year
A consolidated group reports net profit of ¥1,200,000,000 for the year. During the same year, it recognises ¥80,000,000 of unrealised gains on Available-for-Sale securities and a ¥30,000,000 foreign currency translation LOSS.
TOTAL COMPREHENSIVE INCOME = ¥1,200,000,000 (net profit) + ¥80,000,000 (unrealised securities gain) − ¥30,000,000 (translation loss) = ¥1,250,000,000 – presented EITHER within a single continuous statement or as a SEPARATE statement immediately following the Statement of Income.
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Worked Example – Comparing Consolidated and Individual Presentation
The same OCI movements, presented differently by statement type
Example: The same unrealised gain, consolidated vs individual statements
Continuing the prior example, the ¥80,000,000 unrealised securities gain also appears in the PARENT company's OWN individual (non-consolidated) financial statements.
In the CONSOLIDATED financial statements, this ¥80,000,000 is presented WITHIN a comprehensive income TOTAL, as REQUIRED by this Statement. In the parent's OWN INDIVIDUAL financial statements, the SAME ¥80,000,000 movement is recognised WITHIN Net Assets (Valuation and Translation Adjustments) as BEFORE, but NO comprehensive income figure or statement is presented – this Statement's requirement simply does NOT extend to individual, non-consolidated reporting.
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Disclosure Requirements
What ASBJ Statement No. 25 requires
Total comprehensive income and its allocation between owners of the parent and non-controlling interests Each component of other comprehensive income, and related tax effects Reclassification adjustments recycled to profit or loss during the period
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Critical Judgments
Where judgement matters most
SIGNIFICANT JUDGEMENTS
Whether to present a single continuous statement or two consecutive statements
SIGNIFICANT ESTIMATES
Generally minimal – this Statement is primarily a presentational standard reflecting amounts already determined elsewhere
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Relationship to IAS/IFRS
Comparison – J-GAAP vs IAS 1
Feature J-GAAP (ASBJ Statement No. 25) IFRS (IAS 1)
Presentation format choiceSingle statement or two consecutive statementsSingle statement or two consecutive statements – converged
Applies to individual/separate financial statementsNO – consolidated onlyYES – IAS 1 applies at whatever level financial statements are prepared
The comprehensive income CONCEPT and presentation CHOICES are genuinely CONVERGED with IAS 1 – the notable divergence is J-GAAP's LIMITATION of the requirement to CONSOLIDATED statements only, part of the BROADER recurring consolidated/individual dual-track pattern in J-GAAP.
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Statement Mapping
Where every comprehensive income event lands
Event Statement(s) affected Notes
Other comprehensive income movementNet Assets Comprehensive income statementConsolidated statements only
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Related Standards
Cross-reference map
Standard Connection
ASBJ Statement No. 5Supplies the Valuation and Translation Adjustments Net Assets component OCI items are drawn from
ASBJ Statement No. 19Retirement Benefits (Part 3) – supplies the Remeasurements of Defined Benefit Plans OCI component
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Quick-Reference Glossary
Comprehensive income (包括利益)
Net profit plus other comprehensive income for the period, presented only in consolidated financial statements.
Other comprehensive income (その他の包括利益)
Items of income and expense not recognised in profit or loss, such as unrealised securities gains/losses, deferred hedges, translation adjustments, and defined benefit plan remeasurements.
Reclassification adjustment (recycling)
The subsequent transfer of a previously recognised OCI item into profit or loss upon a triggering event, such as sale of a security.
Financial statement key (Japan GAAP terminology)
BS Balance Sheet (貸借対照表)
P&L Statement of Income / Profit and Loss Statement (損益計算書)
Net Assets 純資産の部
SCNA Statement of Changes in Net Assets (株主資本等変動計算書)
SCF Statement of Cash Flows (キャッシュ・フロー計算書)