The statement of comprehensive income is one of five financial statements required in a complete set of external financial statements.
The statement of comprehensive income covers the same period of time as the income statement and consists of two major sections:
- Net income (or net earnings) from the company's income statement
- Other comprehensive income which consists of positive and/or negative amounts for foreign currency translation and hedges, and a few other items
The totals from each of the above sections are summed and are presented as comprehensive income.
The statement of comprehensive income is required only if a company has one or more items that meet the criteria of other comprehensive income.
For a company with an item that qualifies as other comprehensive income, the statement of comprehensive income is usually a separate financial statement that is presented immediately following the income statement. (A company may choose to combine the income statement and the statement of comprehensive income into one continuous financial statement.)
The amount of net income will cause an increase in the stockholders' equity account Retained Earnings (while a net loss will cause a decrease in Retained Earnings).
The amount of other comprehensive income will cause an increase in the stockholders' equity account Accumulated Other Comprehensive Income (while a negative amount will cause a decrease in Accumulated Other Comprehensive Income).