Information about a corporation's operations is presented in a statement of earnings or a statement of comprehensive income. Income statements are prepared on either a current operating performance basis or an all-inclusive basis. Users of these income statements have different opinions about how material, non-recurring cllarges and credits should be treated.
Instructions
(a) Define "current operating performance" and "all-inclusive" as they are used above.
(b) Explain the differences in content and organization of a current operating performance income statement and an all-inclusive income statement. Include a discussion of the proper treatment of material, non-recurring charges, and credits.
(c) Give the main arguments in support of each of the three statements: all-inclusive income statement, current operating performance income statement, and a combined income and retained earnings statement.
(d) Discuss what the category other comprehensive income is based on as a concept.