Research On Comprehensive Income And Its Related Matters

Income statement occupies a very important position in the financial statements. Statement users can learn enterprises operating results, profitability and other information about the enterprise within a certain period through the income statement, which plays a crucial role to the decision of report users. In recent years, with the development of economy, the enterprise profit model and business operations increasingly complex and diverse, the traditional income measurement and presentation become more and more difficult to meet the needs of investors and potential users of financial statements. Users of financial statements are beginning to worry about more and more other income items that bypass the income statement. This paper uses the method of normative analysis, introduces the accounting theoretical foundation of comprehensive income, and comparatively analyzes the latest regulation of the definition and presentation from U.S. Financial Accounting Standards Board (FASB), International Accounting Standards Committee Report (IASB), the UK Accounting Standards Board (ABS) and the Chinese Ministry of Finance. What’s more, it analyses the difference and connection between the other comprehensive income, gains and losses, net profit and other capital reserve. Found that in2014, China defined other comprehensive income and comprehensive income at the level of standards at the first time, and made a detailed description of the components of other comprehensive income, China has basically achieved international convergence in defining the concept of comprehensive income and other comprehensive income. While the presentation of other comprehensive income is different among countries, it is generally divided into "OCI not reclassified" and "OCI reclassified". Even some counties has required enterprises to present the other comprehensive income according to the above two items.In the comparative study, we found two major problems exist in Chinese comprehensive income accounting:First, China hasn’t made more detailed and clear regulations about the reclassified item of other comprehensive Income. The second is the definitions of transactions or events that are related to other comprehensive income are not clearly defined, such as other capital reserve, gains and losses directly recognized in owners’equity, equity transactions.Therefore, we believe that in the process of developing comprehensive income accounting should clearly define and sort out the situation about other capital reserves, equity transactions, gains and losses directly recognized in owners’equity. At the same time, three secondary subjects should be set under "capital reserve" item or two third-class subjects item should be set under "other capital reserves" item, in order to distinguish other capital reserves projects and other projects. Although comprehensive income is playing an increasingly important role, but the net profit as a classic item in the evaluation of the operator’s current performance is irreplaceable.