BC69 In the exposure draft of 2006, the Board proposed that an entity should separately present reclassification adjustments. These adjustments are the amounts reclassified to profit or loss in the current period that were previously recognised in other comprehensive income. The Board decided that adjustments necessary to avoid double‑counting items in total comprehensive income when those items are reclassified to profit or loss in accordance with IFRSs. The Board’s view was that separate presentation of reclassification adjustments is essential to inform users of those amounts that are included as income and expenses in different periods - as income or expenses in other comprehensive income in previous periods and as income or expenses in profit or loss in the current period. Without such information, users may find it difficult to assess the effect of reclassifications on profit or loss and to calculate the overall gain or loss associated with available‑for‑sale financial assets, [IFRS 9 Financial Instruments eliminated the category of available-for-sale financial assets. This paragraph refers to matters relevant when IAS 1 was issued.] cash flow hedges and on translation or disposal of foreign operations.

BC70 Most respondents agreed with the Board’s decision and believe that the disclosure of reclassification adjustments is important to understanding how components recognised in profit or loss are related to other items recognised in equity in two different periods. However, some respondents suggested that the Board should use the term ‘recycling’, rather than ‘reclassification’ as the former term is more common. The Board concluded that both terms are similar in meaning, but decided to use the term ‘reclassification adjustment’ to converge with the terminology used in SFAS 130.