Conceptual Analysis of Comprehensive Income and Operating Income: evidence in the Brazilian Financial Sector

The paper discusses the concepts and meaning of comprehensive income, clean surplus relation, all-inclusive income, current operating income, clean income and dirty surplus. These are discussed from a theoretical standpoint, demonstrating their conceptual divergence as well as their varied applications, either through valuation models based on company accounting figures or reported accounting income. Then examples of accounting rules and standards referring to these concepts are analyzed, showing that in the United States and United Kingdom these concepts are already reported in specific financial statements. In addition, international empirical studies on the subject are reported and applied to calculations for the Brazilian financial sector for the 2001-2004 period, in function of new regulations on appropriation of the appreciation of securities through direct recording in the equity accounts. Evidence is found that the total increment in equity was not recognized in the accounting results disclosed, and the difference was greatest in the period immediately after the regulatory change.