end of the period and all aspects of its financial activities for the
period, thereby enhancing the understandability of the statements. Also,
that total will provide enhanced comparability between enterprises by
providing a benchmark for users.
Describing the total for comprehensive income
69. The term comprehensive income is used consistently in this Statement to
describe the total of all components of comprehensive income, including net
income. However, the Board decided not to require that an enterprise use
that term in financial statements because it traditionally has not
specified how particular amounts should be labeled and often has simply
required that a "descriptive label" be used. In practice, a variety of
terms, such as net income, net earnings, or earnings, are used to describe
the total appearing at the bottom of a statement that reports the results
70. Many respondents to the Exposure Draft indicated that the term
comprehensive income should not be used. They said that the term is
misleading because the amount is neither "comprehensive" nor "income."
Although the Exposure Draft did not require use of the term comprehensive
income, its consistent usage throughout the document (and in its title)
gave respondents the impression that it was required.
71. The Board discussed whether using the term comprehensive income would
be misleading. The Board agreed that comprehensive income is "income"
because changes in equity (changes in assets and liabilities) are
identified by the Concepts Statements as revenues, expenses, gains, and
losses. The Board acknowledged that comprehensive income will never be
completely "comprehensive" because there always will be some assets and
liabilities that cannot be measured with sufficient reliability.
Therefore, those assets and liabilities as well as the changes in them will
not be recognized in the financial statements. For example, the internally
generated intangible asset often referred to as intellectual capital is not
presently measured and recognized in financial statements. The Board
agreed that comprehensive income is "comprehensive" to the extent that it
includes all recognized changes in equity during a period from transactions
and other events and circumstances from nonowner sources. The Board
acknowledged that there are certain changes in equity that have
characteristics of comprehensive income but that are not presently included
in it. (Refer to paragraphs 108-119.) Those items may be addressed in a
broader-scope project on comprehensive income.