Question

Assume the FASB is consulting you on redesigning the Income Statement from its current form to a format that would be more useful to users of the statement. What changes would you recommend? What components of income will your redesigned statement include? Why?

need to write 2-3 pg on what I would do. What would you include or take out that would benefit users?

Answer 1

The Financial Accounting Standards Board establishes financial accounting and reporting standards for public and private companies.

As per Financial Accounting Standards Board ,

In the Income Statement, an entity should disaggregate its income and expenses by function (ie the primary activities in which the entity is engaged, such as selling goods, providing services, manufacturing, advertising, marketing, business development or administration). An entity should further disaggregate those functional amounts by nature and present that information in the Income Statement or in the notes to financial statements.

An entity that does not present its income and expenses disaggregated by function would disaggregate and present its income and expenses by nature in the Income Statement.

Entities that are required to provide a segment note should disaggregate in that note income and expenses by their nature for each reportable segment.

In income statement , comprehensive income includes net income and unrealied income.

FASB establishes and improves financial accounting and reporting standards to provide useful information to investors and other users. Investment decision is based on this analysis. it helps investors to access risk and return on investment.