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

Profit is one of the core concepts of financial accounting, the research about it is an important content of accounting theory, and income index is the most concerned for financial information users especially for the investors. The traditional income report model based on historical cost, matching principle and conservatism principle is adapted to the economic environment of industrial age and the goal of reporting entrusted responsibility. However, along with the rapidly change of economic environment and complicated activities of enterprises, more and more unconventional sources of revenue have become the important factors of revenue. Therefore, it doesn't meet the needs for financial performance information of users of financial statement.In order to make up the shortcomings of the traditional income information and enhance its usefulness, west countries represented by U.S, posed the concept of comprehensive income, and released new accounting standards in which the comprehensive income is required to be presented. In the 21st century, IASB and FASB begins to strengthen cooperation in this study field, and has established a joint working party, and the research scope also expands gradually to the overall reform of financial statements, no longer be confined in income report .In October 2008 they issued "the financial statements preliminary opinions (discussion)", in which they again stressed the accounting report targets of decision-making availability of accounting report targets, confirmed the central position of the statement of financial position of financial statements, and suggested the management intention approach to be presentation."Enterprise Accounting Standard"promulgated in China in February, 2006 embodies the concept of comprehensive income. But whether it can be widely used in china depends not only on the necessity, but also the feasibility of its application in our country.The article begins with the limit of the traditional income recognition mode, from which we can come to a conclusion that it is necessary to report comprehensive income, then analyses the basic theories of comprehensive income including the recognition, measurement, and rationale which reflects its characteristics and superiorities comparing to traditional income pattern. In the aspect of practice, the article introduces the application of comprehensive income statement in U.S. and points out what we could learn from it. Finally, combining with the accounting standards and accounting system of our country, it discusses how to improve comprehensive income report by business enterprises in China, and points that management intention approach will be the Mainstream mode of comprehensive income report, which is not only to cater to the goal of international convergence, but also the reflection of decision-making availability.