Income is the key factor in valuing operational capability of acompany. Failure in maintaining and using the income will cause failureof the company. Therefore, a thorough understanding about incomewould be necessary to avoid mistakes in income based-decision making.There is a difference in viewing income from the perspective of accountingand economic. In accounting view, income must have been realized, buteconomic version says that income also includes unrealized items. It isenough for accounting to view income based on conventional incomestatement, on the other hand, in order to reflect economic income, realizedincome statement must be adjusted to accommodate unrealized economicevents. Accounting and tax view income without significant differencesbecause the two consider the last destination of income would be theincrease of capital/assets.
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