Intermediate Accounting 4 The Income Statement and Income Recognition Elements of the income statement Revenues Revenues are inflows of assets of Revenue recognition a company or settlement of its is the process of liabilities during a period from formally recording delivering or producing goods and reporting an item rendering services, or other In a company s activities that are the company's financial statements ongoing major or central operations
Elements of the Income Statement — Revenues Revenues are inflows of assets of a company or settlement of its liabilities during a period from delivering or producing goods, rendering services, or other activities that are the company’s ongoing major or central operations. Revenue recognition is the process of formally recording and reporting an item in a company’s financial statements. Intermediate Accounting 4 The Income Statement and Income Recognition
Intermediate Accounting 4 The Income Statement and Income Recognition Elements of the income statement Expenses Expenses are outflows of assets of a company or incurrence of liabilities during a period from delivering or producing goods, rendering services or carrying out other activities that are the company s ongoing major or central operations
Elements of the Income Statement — Expenses Expenses are outflows of assets of a company or incurrence of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that are the company’s ongoing major or central operations. Intermediate Accounting 4 The Income Statement and Income Recognition
Intermediate Accounting 4 The Income Statement and Income Recognition Elements of the Income statement-Gains Gains are increases in a companys equity(net assets) from peripheral or incidental transactions of the company and from all other events and circumstances affecting the company auring a period excep those that result from revenues or investments by owners
Elements of the Income Statement — Gains Gains are increases in a company’s equity (net assets) from peripheral or incidental transactions of the company and from all other events and circumstances affecting the company during a period except those that result from revenues or investments by owners. Intermediate Accounting 4 The Income Statement and Income Recognition
Intermediate Accounting 4 The Income Statement and Income Recognition Elements of the income statement Losses Losses are decreases in a companys equity(net assets) from peripheral or incidental transactions of the company and from all other events and circumstances affecting the company during a period except those that result from expenses or distributions to owners
Elements of the Income Statement — Losses Losses are decreases in a company’s equity (net assets) from peripheral or incidental transactions of the company and from all other events and circumstances affecting the company during a period except those that result from expenses or distributions to owners. Intermediate Accounting 4 The Income Statement and Income Recognition
Intermediate Accounting 4 The Income Statement and Income Recognition 3 Income statement content ° ncome from continuing erations Results from discontinued operations EXtraordinary items(net of income taxes Cumulative effects of changes in accounting principles (net oT income taxes) Net income
3. Income statement content • Income from continuing operations • Results from discontinued operations • Extraordinary items (net of income taxes) • Cumulative effects of changes in accounting principles (net of income taxes) • Net income • Earnings per share Intermediate Accounting 4 The Income Statement and Income Recognition