Importantly, the H-S criterion requires the inclusion of all sources of potential increases in consumption, regardless of whether the actual consumption takes place, and regardless of the form in which the consumption occurs. The H-S criterion also implies that any dereases in an individual potential to consume should be subtractes in determining income. An example is expenses that are incurred to earn income.If the gross revenues from Juliet cigar store are $100000, but business expenses are $95000, then Juliet potential consumption has only increased by $5000