All Inclusive Income Concept

Change in equity for an accounting period from business transactions related to nonowner sources; also called comprehensive income. It excludes capital transactions and dividends. The income statement includes all items of profit and loss occurring during the period plus Extraordinary Items. Inclusion of all items affecting earnings makes the profit and loss statement more informative and less subject to judgment. As per Financial Accounting Concept No. 5, comprehensive income items excluded from earnings include: (1) cumulative effect of a change in accounting principle; (2) foreign currency translation adjustments; and (3) unrealized losses on the write-down of a long-term investment portfolio from cost to market value.