Register now or log in to join your professional community.
FInanacial Income only recognize the realize gain and realize loss. On the other hand, the Economic Income recognize realize and unrealize gain and losses. Bceuase of the conservtism principle in Accounting, the investors will get more accurate information. Economic income has some uncertainties because of recognizing the unrealized values where Accountants try their best to avoid these uncertainties to have better reaction from the investors.
The reason is, That the most important disadvantages of economic income is the inability to measure the fair value.
