Research On Our Country’s Accounting Issue Of Consolidated Income

With the development of national economy and social progress, accountingenvironment now also experiences constant changes. First of all, under the currenteconomic situation, many special incomes appear due to the diversity and complication ofenterprise activities and the market surroundings, which urge the balance sheet users toknow the entire changes of the incomes of a corporation so as to choose the fiscalinformation that will be used as the reference for a fiscal decision, Secondly, pricefluctuation, science and technology progress and the emergence of financial tools causemore and more enterprises to add the due loss and profit into the balance sheet instead ofthe income statement. These special loss and profit emerged force the income accountantsto face new issues of confirming, calculating and reporting. Finally, the fiscal targetchanging from accountability to decision usefulness also brings about the issue ofconsolidated income.Comprehensive income refers to changes in net assets caused by the transactionbetween enterprises owners and non-enterprises owners (except for investments anddistribution from the owners) in a certain period, which reflects the net returns.Subjectively speaking, calculating by fair value will be adopted regarding the main itemsof assets and liabilities involved in the economic activities of the enterprises in order toreflect the change of the fiscal business information in the enterprises in a more overallway. However, the wide application of fair value will bring about a series of issueconcerning consolidated income.This paper centers on the issue of consolidated income, the main innovation points arethe following:Firstly, a systematic analysis of the conformation, calculation and presentation ofconsolidated income is presented in this paper. What’s more, the traditional incomeconfirmation principles and the historical cost properties are also evaluated in this paper.Consequently, three key points of the confirmation of consolidated income are advanced:the definition of the enterprises owners, the breakthrough of realization principle, theappropriate application of prudent accounting principle. Secondly, the current six accounting elements will be turned into nine elements, assets,liability, the owner’s equity, revenue, expense, gains, loss, return, consolidated income.Finally, the presentation items are divided into five articles according to theirproperties: business activities, financing activities, termination of business activities,income tax and other consolidated incomes. Meanwhile, the presentation mode forconsolidated income is improved based on the current income statement and also newspecification mode of consolidated income is put forward.Since other problems like derivative financial instruments accounting, price-levelchange accounting are involved, the issue of confirmation and calculation of consolidatedincome is very complicated which will be solved gradually in the future research as long asthe accounting elements involved are viewed and measured in a new way. Additionally, thereasonability and outcome of improvement should be backed up by strong practical data.Therefore, how to carry out the improved balance sheet gradually in the practice ofaccounting needs much deeper probe and research.