What is the purpose of reporting comprehensive income?
A) To provide information for each segment of the business.
B) To provide a consolidation of the income of the firm's segments.
C) To summarize all changes in equity from nonowner sources.
D) To reconcile the difference between net income and cash flows provided from operating activities.

Question

Quizplus · Accepted Answer

The purpose of reporting comprehensive income is to summarize all changes in equity from nonowner sources, such as unrealized gains or losses on investments, foreign currency translation adjustments, and gains or losses from certain types of hedging activities. It is required by accounting standards to provide a comprehensive view of a company's financial performance and to ensure that all changes in equity are reported in a transparent and consistent manner.

What Is the Purpose of Reporting Comprehensive Income