Question: Earnings as defined in SFAC No. 5 are consistent with the current operating performance concept of income. Comprehensive income is consistent with the all- inclusive

Earnings as defined in SFAC No. 5 are consistent with the current operating performance concept of income. Comprehensive income is consistent with the all- inclusive concept of income.

Required:

a. Discuss the current operating performance concept of income.

b. Explain how earnings, as defined in SFAC No. 5 , are consistent with the current operating performance concept of income.

c. Discuss the all- inclusive concept of income.

d. Explain how comprehensive income is consistent with the all- inclusive concept of income.

e. Explain how comprehensive income is consistent with the financial capital maintenance concept.

f. What additional changes in reporting practices would have to occur for financial reporting to be consistent with the physical capital maintenance concept? Have some similar changes already occurred? Give an example.

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