The Financial Accounting Standards Board has finalized new requirements for how to present other comprehensive income in financial statements when amounts are reclassified out of accumulated OCI into net income.

FASB developed the new rule, described in Accounting Standards Update No. 2013-02, as a response to operational concerns that arose from an earlier standard, ASU No. 2011-05, issued in June 2011. FASB deferred certain requirements of the 2011 standard as it worked out a solution.

OCI is a catch basin for gains and losses that are not reported immediately in net income for an accounting period, such as changes in equity arising from investments. Eventually, for various reasons under various accounting rules, those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The original standard narrowed the permissible ways that companies could present comprehensive income and net income as a way to make changes and reclassifications of comprehensive income more prominent in financial statements.

“This update requires preparers to report information on reclassifications out of accumulated other comprehensive income in a format that makes the effects more transparent,” said FASB Chairman Leslie F. Seidman in a prepared statement. “The update improves reporting in a manner that enhances reporting for users of financial statements, without imposing significant costs to preparers of financial statements.”

The new rule says companies are required to present the effects of reclassified accumulated OCI on the line items of net income when the item reclassified is required to be reclassified to net income entirely in the same reporting period. It also requires companies to cross reference to other disclosures that are currently required under existing accounting rules when a portion of the reclassified amount is initially transferred to a balance sheet account instead of directly to income or expense.

FASB says the new standard does not make any new requirements about reporting net income or OCI in financial statements. Instead, it establishes new requirements for reclassifications out of OCI that will present all in one place information about significant amounts that have been reclassified, even if only by cross referencing to related footnote disclosures. Currently such information is scattered through financial statements in a way that makes it difficult for users of financial statements to find.

The new presentation requirement takes effect for reporting periods that begin after Dec. 15, 2012, for public companies and a year later for private companies.

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