Abstract This article focuses on confusion with respect to the meaning and nature of business income and the role of periodic earnings in evaluating enterprise performance in the U.S. The prevailing view is that wealth enhancement is the underlying characteristic of business income. Standard setting for financial reporting has sought to improve the results of accrual accounting, especially the measure of periodic income. Uncertainty about the probability of cash consequences imposes constraints on financial reporting. Financial reporting has a significant role to play in maintaining an orderly capital market.
Oscar S. Gellein (Mon,) studied this question.