Statement of Comprehensive Income


 
Profit and Loss Statements > Forum Log in

Statement of Comprehensive Income
Clevian Muchabveyo, Student (University), Zimbabwe

I'd like to understand the definition of a statement of comprehensive income and how to prepare it.
I believe the statement of comprehensive income represents the performance of a business. If there are normal expenses (wages, advertisement etc) we add them and less that with the normal revenues generated during the period (month) and that should result in a profit or a loss.
Having that, if there are other sources of comprehensive income (e.g. personal furniture of the owner), then we also add those.
Lastly we add all the total to get the total comprehensive income. 29-9-2017
 

 
What is Comprehensive Income
Dieter Hoffenbrauer, Interim Manager, Germany
DEFINITION
The "comprehensive income" is an overview of ALL income and expenses that were recognized during a specified period. The comprehensive income statement includes the revenue, finance costs, tax expenses, discontinued operations, profit share and profit/loss. Comprehensive income is typically reported in a separate statement from income resulting from owner changes in equity it is also allowed to provide all information in a single statement.

COMPREHENSIVE
You should understand comprehensive as meaning "including many if not all details". The opposite of the word comprehensive is incomplete or limited.

STATEMENT OF COMPREHENSIVE INCOME VERSUS INCOME STATEMENT
The most used and important financial statement is the income (profit and loss) statement. Such P&L Statement provides an overview of all regular sales and expenses, including taxes and interest. At the end of an income statement is the Net Income (also called earnings). However, net income on an Income Statement does not always includes everything. Because it only includes income from regular, normal business operations. These result from all regular, day-to-day activities of a company.
But sometimes companies make a profit or loss due to special, irregular circumstances, like changes in the value of certain assets they own. Such changes are then shown in the cash flow statement and their net impact on earnings is shown in the section "comprehensive income" of the income statement.

COMPREHENSIVE INCOME CATEGORIES. EXAMPLES
  • Unrealized gains and losses on available-for-sale investments;
  • Cash flow hedges, which can change in value depending on the value of the securities in the market;
  • Debt securities transferred from available for sale to held to maturity, which may incur unrealized gains or losses;
  • Foreign currency translation adjustments;
  • Gains or losses in pensions and/or post-retirement benefit plans.
USAGE
Compared to regular income items, comprehensive income items occur less frequently. Depending on the circumstances they can be a legal and perfectly OK way to deal with business or market circumstances, but they can also be used in an objectionable, immoral or even illegal way of earnings management. 2-10-2017
 

 











 

  Do you wish to study further? You can learn more from the summary, forum, discussions, lessons, courses, training, instructions, expert tips, best practices and education sources. Register.  


Special Interest Group Leader

You here


More on Profit and Loss Statements
Summary
Forum
Best Practices

Expert Tips

Resources

About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2017 12manage - The Executive Fast Track. V14.1 - Last updated: 22-10-2017. All names tm by their owners.