Comprehensive Income Definition

Comprehensive income (comprehensive earnings) is financial term that is used to denote change in the equity or net assets of a certain company. This change in the company’s equity is brought about by events which remain uncontrolled by the owners of the company. Some of the instances of events that contribute to shape up the feature of comprehensive income include shift in operating expenses, loss or profit that is earned through the sale the property and other transactions that are generally not categorized as net income.

How to make Comprehensive Income Statement

A comprehensive income statement begins at the place where an ordinary income gets started. It begins with the net profit plus or minus losses or gains that are not realized in the income statement. Rather, they are directly showed in the equity section of the concerned company.

Tracking individual comprehensive income statement can help a company come by valuable information regarding many-sided financial stability of the concerned business. A comprehensive income statement is usually prepared by the accountants of a company. It seeks to demonstrate total comprehensive income earned by a business entity.

Comprehensive income statement is not supposed to be a primary constituent of the entire set of the financial statement of a company. Despite this fact, it plays a significant role in presenting the actual inflow or outflow of cash of a business entity.

Comprehensive Income Example

It might be interesting for you to know about some of the general features that are contained in comprehensive income statement. Common comprehensive income examples include foreign currency translation loss or gain, unrealized loss or gain on marketable securities and loses or gains on derivatives.