The purpose of the statement of comprehensive income is to report current period changes in equity that arose from non-owner transactions.
What is non-owner equity?
- Additionally, a business may receive equity from non-ownership sources. These non-owner sources of equity include capital contributions and earnings the company receives from securities and foreign exchange investments.
- There are four types of non-owner sources of equity change. The four main categories are the changes in marketable securities held for sale, the minimum pension liabilities, foreign currency transactions, and the value change of futures contracts in hedged positions.
- The typical net income does not account for many other kinds of earnings and losses. For tax purposes, lottery wins, for instance, are regarded as comprehensive income; nonetheless, they wouldn't be considered regular earned income.
The purpose of the statement of comprehensive income is to report current period changes in equity that arose from non-owner transactions.
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