Income Statement vs. Comprehensive Income Statement

The objective of general purpose financial statements is to provide information about the financial position, financial performance, and cash flows of a company that is useful to a wide range of users in making economic decisions. In June 1997, the FASB issued FAS130 on how to report comprehensive income, so second type of income statement is came up. Under the traditional income concept-income statement, extraordinary and nonrecurring gains and losses are excluded from income. Under the all-inclusive income conceptcomprehensive income statement, all revenues, expenses, gains, and losses recognized during the period are included in income, regardless of whether they are considered to be operations of the period. International Accounting Standards Board (IASB) also introduced this issue in 2009. According to the standard a business entity using IFRS must also include a statement of comprehensive income. The aim of this study is to discuss the necessity and need for presentation of two performance statementsincome comprehensive incomeespecially from the perspective from investors while these items are stated in equity section of the balance sheets. Effects of this dual reporting of income statements which leads confusion are also discussed by examining cases from different countries and survey is conducted to BIST (Borsa Istanbul) 30 companies from Turkey.

extraordinary and nonrecurring gains and losses are excluded from income. This is an all-inclusive income concept-comprehensive income statement, in which all revenues, expenses, gains, and losses recognized during the period are included in income, regardless of whether they are considered to be operations of the period. After FASB International Accounting Standards Board (IASB) also introduced this issue in 2009.
Profit or loss is defined as "the total of income less expenses, excluding the components of other comprehensive income". Other comprehensive income is defined as comprising "items of income and expense (including reclassification adjustments) that are not recognized in profit or loss as required or permitted by other IFRSs". Total comprehensive income is defined as "the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners". (IAS 1.) In order to calculate comprehensive income, for the period other comprehensive income items must be added to profit or loss of the period. or IFRS 9 Financial Instruments  Gains and losses on remeasuring an investment in equity instruments where the entity has elected to present them in other comprehensive income in accordance with IFRS 9  The effects of changes in the credit risk of a financial liability designated as at fair value through profit and loss under IFRS 9. An entity has a choice of presenting:  a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections, or  two statements: o a separate statement of profit or loss o a statement of comprehensive income, immediately following the statement of profit or loss and beginning with profit or loss [IAS 1.10A] The statement(s) must present: [IAS 1.81A]  profit or loss  total other comprehensive income  comprehensive income for the period Under the revised presentation requirements including comprehensive income information Bank of America showed comprehensive income figures on either the face of the income statement or in a separate consecutive statement as follows, as it seen from the example there are two income data. (Peters, 2012) Vol.11, No.35, 2019 37 income data will be taken in economic decisions is a very important issue.
Here is another example is given below which represents the dual income reporting difference. If company has material other comprehensive income or loss for the period, then there may be huge difference between these two income figures.
The related information is summarized below. As of December,31,2016 company declares -47.000.000 Turkish Liras (TL) net income (loss) and because of the huge other comprehensive income items, the total compressive income is -8204% percent of the net income information. (3.809.000.000 TL)  Vol.11, No.35, 2019 public companies. Because financial statements of one company lack of information, 29 firms are included in the study.
The aim of the study is to investigate and see the difference of this dual income reporting of first 29 companies in Istanbul Stock Exchange.
The distribution of types of companies in this study are categorized as financial or nonfinancial are shown in Table 1, Table 2. Single According the data that is investigated in this study 24% of 29 companies are financial and 76% of them is nonfinancial company. According to IAS 1 companies can prepare single income statement which includes comprehensive income information or two separate income statements. (a statement of profit or loss and other comprehensive income for the period (presented as a single statement, or by presenting the profit or loss section in a separate statement of profit or loss, immediately followed by a statement presenting comprehensive income beginning with profit or loss). In this study this information is also investigated. The results presented in Table 3.

Findings of The Study
In this study the data set includes firms listing in ISE 30 indices as of December 31,2016 and the study is restricted for two years; 2015 and 2016. Since the financial statements of one company lack of information, available information of 29 companies is considered in the study. The aim of the study is to compare net income and the comprehensive income figures of these companies for the years 2015 and 2016.
In this study the net income information is for each company is represented as 100 and comprehensive income is calculated as a percentage of net income. This logic is conducted to each company and to each year (2015 and 2016) separately in order to see how these figures differ from each other.  From the perspective of the investors financial information especially net income information is very important and valuable in order to give the right economic decisions. In this dual reporting there are two income figures. For an investor which income data will be taken in economic decisions may be confusing. Since the main purpose of financial statements is giving information to decision makers, this information must be accurate and not lead to confusion. Although comprehensive income information is very important for an investor calculation of EPS (Earnings Per Share) is done by using net income figures. So that the most important figure for an investor is net income while the other (comprehensive income) is just informative. From this point of view presenting two separate income statement will be better informative than combined single income statement.