The following points highlight the four main steps involved in procedure of computing accounting income. The steps are: 1. Defining the Particular Accounting Period 2. Identifying Revenues of the Accounting Period Selected 3. Identifying Costs Corresponding to Revenues Earned 4. Matching Principle. Step # 1. Defining the Particular Accounting Period: Accounting income refers to the financial performance of the firm [...]
In this article we will discuss about Comprehensive Income:- 1. Concept of Comprehensive Income 2. Components of Comprehensive Income 3. Advantages. Concept of Comprehensive Income: Comprehensive income, also known as all-inclusive concept of income, is the change in equity (net assets) of an entity during a period from transactions and other events and circumstances from non-owner sources. It includes all [...]
In this article we will discuss about Accounting Standard (AS) 5 with regard to changes in accounting estimates and accounting policies. AS-5 on Changes in Accounting Estimates: 1. As a result of the uncertainties inherent in business activities many financial statement items cannot be measured with precision but can only be estimated. The estimation process involves judgements based on the [...]