Whether to include current year’s income/expense in net investable asset?

Hi guys, when calculating required return, if we are given current year’s income and expense, and they don’t net to zero, do we need to add/deduct them from our net investable asset? They appeared to be handled inconsistently based on some practice exams I’d come across.

I researched a bit, and so far the most convincing points I’d found are:

  1. If current year’s expense > income, the shortfall need to be deducted from net investable asset. On the other hand, if current year income > expense, no need to make change to investable asset.

  2. Generally, if the question does not explicitly mention it, don’t include this year’s net income and expense in net investable asset calculation.

Are the above points correct? I just did Schweser Practice Exam 3 AM. In the Jim Wilson case, the question does not mention his income at all, and only his current year’s expenses (living expense + support brother) are mentioned. The question also does not mention whether the expenses are already paid for, or whether the decision is being made at the end of the “current year”. However, in the solution for the required return calculation, I was surprised to find the current year’s expense NOT being deducted from his net investable asset. Why is that?

Would really appreciate any advices/suggestions. Thanks!

I am also wondering why they didn’t subtract those living expenses for the current year. But still, as many have already said, Schweser may not be the best in formulating the questions and sometimes the answer may not be 100% correct.

Bump, anyone else knows how to deal with this?