Stunning Purpose Of Comprehensive Income

These amounts cannot be included on a companys income statement because the investments are still in play.

Purpose of comprehensive income. The statement of comprehensive income is one of the five financial statements required in a complete set of financial statements for distribution outside of a corporation. A statement of comprehensive income is the overall income statement that consolidates standard income statement which gives details about the repetitive operations of the company and other comprehensive income which gives details about the non-operational transactions such as the sale of assets patents etc. The statement of comprehensive income covers the same period of time as the income statement and consists of two major sections.

The purpose of comprehensive income is to include a total of all operating and financial events that affect non-owners interests in a business. Comprehensive income is often listed on the financial statements to include all other revenues expenses gains and losses that affected stockholders equity account during a period. Statement of Comprehensive Income - Accounting College.

The income is used to summarize the profitability of the company by classification of revenue and expense accrued in the income statement during that period. But dont depend solely on it. Basically comprehensive income consists of all of the revenues gains expenses and losses that caused stockholders equity to change during the accounting period.

The amount of net income for the period is added to retained earnings while the amount of other comprehensive income is added to accumulated other comprehensive income. Uses of a Statement of Comprehensive Income. The performance of a company is reported in the statement of profit or loss and other comprehensive income.

The statement of comprehensive income also known as the Profit Loss account or the Income statement is a financial statement which provides the income and expenditure of a business over an accounting period. It usually prepares and presents monthly quarterly and annually. Preparing the income statement sheds light on a companys financial events.

As such it is literally a more comprehensive and holistic view of the drivers of a companys operations and other. 2013-02 the OCI statement is either part of a single statement or the second part of a two-part comprehensive income statement. As explained earlier the statement of comprehensive income encompasses the income statement and other comprehensive income.