comprehensive income

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The total of the operating profits and the holding gains of a company for an accounting period. The operating profit is the difference between the operating income and expenditure. The holding gains result from any increases in the value of assets between their dates of purchase and their dates of sale. In historical-cost accounting no distinction is made between operating profits and holding gains. One criticism of this form of accounting is that, by not recognizing holding gains, profits can be overstated and distributed; this could affect the running of the company. Current-cost accounting is based on the maintenance of physical operating capacity and isolates holding gains.

Subjects: Accounting.

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