Discussion Of Comprehensive Income

With the development of economy, income statement is becoming more and more important. The traditional income statement caa't keep up with transitions and can't satisfy the user, so traditional income statement is faced with challenge. In 1990's,ASB, FASB and IAS were devoting themselves to reforming the statement. A new statement, which reports comprehensive income, is coming into being.The concept of comprehensive income is "the change of net asset that comes from the transition of the entity or other affairs". It includes all change except investing of owner and assignation to owners. The comprehensive income is different from traditional one in many characters.How to confirm and measure comprehensive income is the most difficult thing. Now problems on theory are not solved. The regulations only reorganize the items of balance sheet and income statement. The attribution of comprehensive income should be present value, but in practice we use a mixed attribution. Other problems such as when to confirm, how to confirm, how to distinguish between net income and other comprehensive income are not solved too.Now we can report comprehensive income in three ways. The first one is "two statements method", the second one is "one statement method", and the third one is "the change of equity method". They all have advantage and disadvantage. "One statement method" is the best in three.We should pay attention to the content of comprehensive income. The item of our statement is different from other countries such as America. We should find out the proper comprehensive income items which are fit to the reality of our country. I put forward two methods. One is reserved, the other is radical.To report comprehensive income is necessary in our country. It will improvethe exposure of information, make capital market develop, solve the difficulty of financial instrument, let our accounting get in touch with international accounting. We may meet some problems in reporting comprehensive income but these problems can be solved. For example, how should we pay tax and assign dividend or we should emphasize net income or comprehensive income. We should propose comprehensive income statement in steps. The first step is to prepare supplement statement. The second step is to prepare a solo comprehensive income statement. The third step is to prepare extensive income statement. The spread of comprehensive income statement need some outside conditions such as preparing accounting principle, separating tax accounting from financial accounting, improving the standard of accountant etc.