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The application of this concept is one of the two main approaches to measuring earnings. The concept is explained in the International Accounting Standard No.8, “Unusual and Prior Period Items and Changes in Accounting Policy”.

When earnings are measured on the basis of this concept, income is considered to be the amount remaining after all items (including write-offs and capital gains and losses, and excluding dividends and any other transactions between the enterprise and its shareholders or investors) causing any increase or decrease in the shareholders’ or investors’ interests during the accounting period, are allowed for.

Source Publication:
OECD & IMF, 2004, Glossary of Foreign Direct Investment Terms and Definitions, Paris and Washington DC.

Cross References:
Current operating performance concept (COPC)

Statistical Theme: Financial statistics

Created on Tuesday, September 25, 2001

Last updated on Thursday, November 4, 2004