Final answer:
An income statement must include both regular income and expenses as well as unrealized gains/losses. Although unrealized gains/losses are typically reported in other comprehensive income, they can be included in the income statement for certain types of companies due to specific accounting standards. National income, analogous to GDP, represents the total income earned and is reflected in the income statement as revenues.
Step-by-step explanation:
An income statement must include several key elements to ensure it accurately reflects a company's financial performance for a given period. In addition to regular income and expenses, the statement should include items such as unrealized gains/losses. These are gains or losses from investments or securities that a company owns but has not yet sold, thus the gains or losses are not yet realized. Whereas realized gains/losses (those from sold assets) are always included on the income statement, unrealized gains/losses are often reported in other comprehensive income and not in the main income statement except for certain financial industries or investment companies where it's reported in earnings due to accounting standards like IFRS 9 or ASU 2016-01.
Another key element related to GDP and income statements is the concept of national income (Y), which is closely associated with GDP. When we talk about GDP, we're referring to the total economic output or the sum of all income received for contributing resources to GDP. This is represented on a standard income statement as revenues or income. It's important to note that all components included in the income statement should be measured in real terms, which means they are adjusted for inflation to reflect the true economic value.