The Study On The Application Of The Comprehensive Income Statement In China

Our country is in the process of rapid economic development, and things change every day. Accounting theory and method also develop along with the economical development. As the product of accounting information system, accounting statement certainly cannot avoid developing, especially the income statement. Apart from its own flaw, there are some other reasons for its change: the changes of the external environment, and something new introduced into accounting which cause the income statement can't provide sufficient information. The comprehensive income statement has been introduced by accounting organizations and International Accounting Standards Committee in some western countries as additional adjustment measure. In February, 2006 China promulgated "Enterprise Accountant Principles". We can find that this is an evidence of transformation from present income statement to comprehensive income statement. But the comprehensive income statement is based on the advanced accounting theory and method in the western countries, we should consider not only the necessity of its application in our country, but also the feasibility of its application. This thesis attempts to analysis the necessity and feasibility of the comprehensive statement application, and proposes its application steps and forms.I. Main contents and viewpointThe thesis is divided into five parts, the main content and viewpoints are as follows: The first chapter mainly discusses the present income statement is facing many problems. This part points out that: the model of present income determination is based on the cost principle, the income realization principle, the matching principle, and conservation principle, challenges and problems are inevitable. The introduction of comprehensive income statement may solve the problems well.The second chapter introduces the rationale of comprehensive income statement. Its definition proposed by Financial Accounting Standard Board (FASB) is: the change of net assets over a specified period caused by all things except transactions with owners of one enterprise. It includes realized and unrealized net assets changes. This chapter analyzes comprehensive income statement's goal, angle to recognize gain (loss), contents and other rationale.The third chapter introduces the application of comprehensive income statement overseas, and points out what we could learn from it. This part firstly introduces the application models of comprehensive income statement of four main accounting organizations, includes: Accounting Standards Board of English, Federal Accounting Standards Board of America, International Accounting Standards Committee and the Group of G4+1. Afterwards, the thesis concludes the similarity and differences of these four models, and indicates the direction of improvement of Chinese income statement.The fourth chapter discusses the necessity, feasibility and model of the comprehensive statement application in China. As the beginning of this part, the writer gives reasons of why the comprehensive income statement is necessary for China. Next, the writer analyzes the comprehensive income statement has had certain basis for application in China. For example, the new accounting principles proposes the"gain"and"loss"essential factors, and we can get the fair value of many assets easier than before, and tax accounting separated itself from Financial accounting, and so on. After that, the thesis gives the determined model of comprehensive income. Comprehensive income includes earnings and other comprehensive income; its standard of recognition is"realized"and"realizable"; the measurement is the cost and present value. Finally, the steps of application are divided into three steps: the first step is to disclose comprehensive income information by additional table; the second step is to use comprehensive income statement (expanded income statement) instead of income statement; the third step is to reform income statement.The fifth chapter analyzes the problems which likely exists in the process of comprehensive income statement application, and proposes the corresponding solutions. The application and promotion of new things will meet a variety of problems, so as the comprehensive income statement. But we can't give up it just because of difficulties. We should examine the problems in depth and we believe that we can solve them.II. Major contributes(I)Discussing comprehensive income statement under the background of new principlesMost of the study of income statement are limited to the income statement which ruled by the accounting principle promulgated in 2002 or earlier. In February, 2006 China has promulgated new accounting principles. This thesis discusses problems about comprehensive income statement under the background of new principles. Firstly, the thesis analyzes the income recognition model ruled by the new principles, and the problems of income statement. Secondly, the new principles provide feasibility to the applying of comprehensive income statement. Thirdly, considers the new principles'requirement when suggest the concrete form of reporting comprehensive income.(II)Advocates the gradual pattern to apply comprehensive income statementMany scholars had discussed the application forms of comprehensive income statement. The main viewpoints is: using one form to report comprehensive income, or using another table to report other comprehensive income, or applying comprehensive income statement step by step. This thesis advocates the gradual pattern to apply comprehensive income statement, and believe that pattern would be more suitable to change income statement according to Chinese condition.