A difference between the all-inclusive and the comprehensive income approaches to profit measurement is that:
A) the all-inclusive approach is broader than the comprehensive income approach
B) the two approaches have different treatments for prior-period adjustments
C) the comprehensive income approach includes all recognised changes in the carrying amount of assets and liabilities in the profit calculation
D) all are differences

Question

Quizplus · Accepted Answer

The comprehensive income approach includes all recognised changes in the carrying amount of assets and liabilities in the profit calculation, while the all-inclusive approach only includes transactions directly related to revenue, expenses, gains and losses. This difference makes the comprehensive income approach broader in scope than the all-inclusive approach. Option A is incorrect because the comprehensive income approach is broader, not the all-inclusive. Option B is incorrect because both approaches have the same treatment for prior-period adjustments. Option D is not a correct choice as only one option is correct.

A Difference Between the All-Inclusive and the Comprehensive Income Approaches