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Comprehensive income: what is it for?


What ECONOMIC EVENTS can affect EQUITY but NOT INCOME STATEMENT?


...those items which are present in the COMPREHENSIVE INCOME!


COMPREHENSIVE INCOME = NET INCOME + some adjustments like...


... changes that originate from non-owner sources, such as adjustments to the price of holding securities (bonds, stocks... available for sale), foreign currency translation gains or losses, etc.


unrealized gains for, let’s say, a 5k value increase of a participation in another company, affect an asset account and an equity account, like this:



Companies, especially large ones, report these items both in the income

statement, in a separate section (’’other comprehensive income’’) and in the statement of comprehensive income.


תגובות


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