ADMN 3221H Chapter 4: Chapter 4

• School: Trent University
• Department: Business Administration
• Course: ADMN 3221H
• Professor: Ebadul Islam

Document Summary

Income statement report that measures the success of a company"s operations for a specific time period. Income statements helps users to: evaluate the enterprise"s past performance and profitability, provide a basis for predicting future performance, help assess the risk of not achieving future net cash inflows. Items that cannot be measured reliably are not reported in the income statement. Income numbers are affected by the accounting methods that are used: different methods of depreciation, etc. Income measurement involves the use of estimates: estimates of useful life, etc, financial reporting bias, gaap. Separate component: component must have operations, cash flows, and financial elements that are clearly distinguishable from the rest of the enterprise, must generate its own net cash flows. Presentation of performance: under ifrs, the statement of comprehensive income can be presented either, as a single combined statement, or, as two separate statements, companies can present income using either, single-step income statement, or, multiple-step income statement.