Summary
This Form 8-K filing by Microsoft Corporation (MSFT) on November 2, 2012, primarily serves to report the retrospective adoption of an amendment to Accounting Standards Codification Topic 220, "Comprehensive Income" (ASC 220). This change affects the presentation of comprehensive income in financial statements, requiring companies to present it either in a single continuous statement or two separate statements, eliminating the option to report it in the statement of changes in stockholders' equity. For investors, this filing is important because it signifies a change in how financial results are presented, not in the underlying financial performance or recognition of revenue and expenses. Microsoft is providing comparative data for the three fiscal years ended June 30, 2012, to illustrate the impact of this presentation change on their comprehensive income figures. While net income figures remain the same, the components of "Other comprehensive income (loss)" are now presented differently.
Key Highlights
- 1Microsoft is retrospectively adopting a change in accounting standards (ASC 220) for the presentation of comprehensive income.
- 2The adoption impacts how other comprehensive income (OCI) and its components are displayed in financial statements.
- 3The new guidance requires OCI to be presented in either a single statement of net income and OCI or two separate consecutive statements.
- 4This is a change in presentation only and does not alter Microsoft's revenue recognition, measurement, or existing accounting policies.
- 5The filing includes comparative data on comprehensive income for the fiscal years ended June 30, 2012, 2011, and 2010, illustrating the presentation adjustment.
- 6Net income figures for the presented periods remain unchanged by this accounting standard adoption.
- 7The information provided does not amend or restate previous audited consolidated financial statements or reflect events after the Form 10-K filing for the year ended June 30, 2012.