The Research Into China’s Consolidated Income Statement Based On The Theory Of Comprehensive Income

In June2009, the Ministry of Finance announced the "Enterprise Accounting Standards No.3," our statement of comprehensive income is gradually moving to the concept, however, as a matter of fact, the theory of income and expense is still the leader of the income statement. With the changes of non-financial corporate market environment and the company’s strategy, more and more companies get involved in the financial activities and compliment corporate strategy called non-related diversification, current income statement based on the theory of income and expense does not comprehensively reflect the capability of corporate’s profitability, on the other hand, the consolidated income statement based on the concept of comprehensive income will be able to truly reflect the changes in the economic environment and business environment, and this will contribute to the decision usefulness of users, therefore, the improvement into our income statement has a dual significance into the theory and practice of it.Firstly, this dissertation elaborates the theory of comprehensive income, and analyzes the process from income statement to consolidated income statement in foreign states as well as the outcomes concerning it. Secondly, it dissected the shortcomings of the current income statement, which discusses the need for improvements. On the base of it, this dissertation proposes the statement of comprehensive income suitable for China.This dissertation uses the case study method into Shanghai Automotive Group Co., Ltd.(referred to as " SAIC "), the study about existing statement before improvements is based on SAIC’s income statement data from2006to2013, because China issued new accounting standards in2006, however, the study about consolidated income statement after improvements is based on SAIC’s income statement data from2009to2013, since the Ministry of Finance announced the "Enterprise accounting Standards3number " in June2009, which requires enterprises to add "other comprehensive income" and "comprehensive income" into the income statement. Finally, through the adjustment into the data on the SAIC in2013, this dissertation proposes the consolidated income statement and merits of it after the improvements. In addition, this dissertation is based on the improved consolidated income statement, and the most common financial analysis (the non-financial enterprise performance evaluation system made by SASAC and DuPont Analysis System) has been improved. It also compares the similarities and differences about improvements and analyzes the advantages about change.It is foreseeable this improvement will be one of the most important trends about development of China’s accounting realm, and be the sign of "international convergence". Moreover, the improvement into the income statement will help improve the development of financial analysis and performance evaluation. On the base of it, this dissertation is significant to the theory and practice.