Which statement is FALSE regarding the reporting of investment-related income?

The correct answer is that negative net investment income should be reported as negative revenue. This statement is false because typically, negative net investment income arises when the expenses associated with managing investments exceed the income generated from those investments. In accounting practices, it is more appropriate to classify such negative investment income as an expenditure rather than as negative revenue. This is because the concept of revenue is typically associated with inflows from various sources, while expenditures reflect the costs incurred.

When reporting investment-related income, entities are required to provide clear and distinct categories for income and expenses associated with investments. Components of investment income, such as interest, dividends, and gains or losses, should be reported separately to give stakeholders a clearer picture of the financial situation. Additionally, it is presumed that investment income is reported in the same fund where the investments reside, maintaining consistency in financial reporting.