accumulated other comprehensive income

An entry in the stockholders' equity section of the balance sheet that reports the cumulative amounts of Other Comprehensive Income.

appropriated retained earnings

retained earnings account that is restricted for a specific use, usually to comply with contractual requirements, board of directors' policy, or current necessity

capital maintenance approach

An income measurement approach in which a company determines income for the period based on the change in equity, after adjusting for capital contributions or distributions (dividends).

changes in estimates

Adjustments or changes that companies must make because financial circumstances did not turn out as expected.

comprehensive income

Income measure that includes all changes in equity during a period except those resulting from investments by owners and distributions to owners

current operating performance approach

Income-reporting approach that advocates reporting only regular and recurring revenue and expense elements, but not irregular items, in income

discontinued operation

Occurs for a company when two things happen: (1) a company eliminates the results of operations and cash flows of a component from its ongoing operations, and (2) there is no significant continuing involvement in that component after the disposal transact

earnings management

The planned timing of revenues, expenses, gains, and losses to smooth out bumps in earnings

earnings per share (EPS)

A distilled and important income figure, calculated as net income minus preferred dividends (income available to common stockholders), divided by the weighted average of common shares outstanding.

extraordinary items

Nonrecurring material items that differ significantly from a company's typical business activities.

income statement

The financial report that measures the success of company operations for a given period of time.

intraperiod tax allocation

Reporting of irregular items within an accounting period on the income statement or statement of retained earnings net of tax.

irregular items

Income-statement components for which the FASB has established special reporting rules

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.

multiple-step income statement

Income statement format that separates operating transactions from nonoperating transactions, and matches costs and expenses with related revenues.

other comprehensive income

Measure of the amounts of all gains and losses in a period that bypass the income statement but affect stockholders' equity.

prior period adjustments

Corrections of accounting errors made in previous accounting periods.

quality of earnings

The extent to which earnings is useful to investors and creditors in making resource allocation decisions, generally in terms of predicting future earnings and cash flows