Financial Reporting wrestles with the concept and reporting of transactional results vis-a-vis income from going operations, other reportable events like interest and extraordinary items, and discontinued operations, versus an economic view as seen incorporating Other Comprehensive Income (OCI) for a more holistic or collective view. Cite appropriate Accounting Standards Codification (ASC) authority in your discussion to support your position and enhance the discussion with example cases.
The text references these issues in various cases, but by example in Chapters 5, 6 and 7:
Ch 5: Nature of Income pp. 150-151, esp. J.R. Hicks, the “definer” of economic income
Ch 5: Income Recognition on pp. 155-157
Ch 6: Other Comprehensive Income (OCI), pp. 203-207
Ch 7: Intro p. 241-242 on “flows vs. stocks” and 1ST paragraph, p. 231, “economic concept of income”
REQUIRED: Discuss the differences between the economic and accounting concepts of income and how that difference appears in our U.S. GAAP financial statements. Address the balance sheet and income statement views of accounting for and reporting “income” and how these opposing views relate to this broad, somewhat unresolved issue. Cite appropriate ASC authority.