Question

The accounting profession has adopted a modified all-inclusive concept to income reporting. Using this approach companies report unusual or irregular items as a part of net income. What are these items and they are they reported separately on the income statement?

Answer 1

Modified all-inclusive concept- Approach, adopted by the accounting profession, that dictates that companies record just about all items, including irregular ones, as part of net income, and that companies must highlight irregular items in the financial statements. These Irregular items fall into six general categories:
(1) discontinued operations,
(2) extraordinary items,
(3) unusual gains and losses,
(4) changes in accounting principle,
(5) changes in estimates, and
(6) corrections of errors.