debate 6-1 comprehensive income

Need help coming up with three questions for the opposing team?

Team 1: Defend comprehensive income. Your defense should relate to the conceptual framework and to the concept of capital maintenance where appropriate.

Team 2: Oppose comprehensive income. Your opposition should relate to the conceptual framework and to the concept of capital maintenance where appropriate.

Oppose comprehensive income

1. Comprehensive income should not be reported because it is not consistent with the current-operating performance concept of income and it represents a departure from the realization principle

2. For the most part, net income includes the results of transactions and events on the performance of the company for the period. It is historical in nature and provides accounting information which is relevant, objective and reliable. It provides information to investors on how their monetary investments were used to generate dollars for the enterprise and to increase investor wealth.

3. Because net income is primarily based on the current-operating concept of income, it provides predictive ability regarding future performance of the company. It shows the amount of revenues realized or realizable during the accounting period. These amounts can be extrapolated into the future. It shows the expenses associated with generating those revenues. These too can be extrapolated.

1. Comprehensive income includes items which do not have predictive ability. It includes the effects of price level adjustments and foreign currency translation adjustments. Including holding gains and losses obscures the measure of income available for distribution to stockholders. Holding gains have not been realized and are not yet available for distribution. Foreign currency translation adjustments are bookkeeping plugs that result from using the average exchange rate for income statement adjustments and the current rate for balance sheet adjustments. They are not realized and do not affect the amount of dollars that are currently.