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Comprehensive income therefore includes sales and expenses incurred in the course of business appearing on the income statement, as well as many items that bypass the income statement such as gains and losses from currency translation (see Chapter 9) and changes in the value of certain securities. Comprehensive income reflects the change in the magnitude of the owners’ claim on the corporation resulting from all activities other than transactions with its shareholders, such as share issuance or repurchase, or dividend distributions. The term “other comprehensive income” refers to all of those items of comprehensive income that are not included on the income statement.

Companies that have other comprehensive income are required to disclose its composition in either the income statement, as part of the statement of changes in equity, or as a separate statement of comprehensive income.

For more information, see all articles on: Accounting, Financial Statement Analysis, Fundamental Analysis

See also:

Comprehensive Income

Adjusting Net Income for Currency Translation

Clean Surplus Accounting

Statement of Shareholders Equity

What is Owners’ Equity