scholarly journals FINANCIAL REPORTING ON COMPREHENSIVE INCOME – THE CASE OF INSURANCE COMPANIES FROM THE REPUBLIC OF SERBIA

TEME ◽  
2021 ◽  
pp. 1481
Author(s):  
Nemanja Karapavlović ◽  
Vladimir Stančić ◽  
Evica Petrović
Keyword(s):  
Financial Reporting ◽  
Life Insurance ◽  
Insurance Companies ◽  
Real Sector ◽  
Net Income ◽  
The Real ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
The Republic ◽  
Over Time

The objective of the paper is to research if the specificities of insurance business influence the fact that in insurance companies more components of other comprehensive income occur, as well as if in insurance companies different components of other comprehensive income are represented compared to the companies from the real sector. Furthermore, the paper should show if net income and net comprehensive income of insurance companies are significantly different, and which one of them is more volatile over time. The results of the research suggest that in the insurance companies more components of other comprehensive income are represented than in the companies from the real sector, as well as that that the most represented components of other comprehensive income in insurance companies are not different from the real sector companies, but that their frequency of appearance is higher. Statistical analysis conducted at the level of population has shown that net income and net comprehensive income are not significantly different. Also, it was established that net comprehensive income of insurance companies was more volatile over time than net income. However, by segmentation of total population according to types of insurance dealt with by insurance companies to life insurance companies, non-life insurance companies and those doing activities of both life and non-life insurance, it was established that in certain cases net income and net comprehensive income are statistically significantly different, as well as that net income was more volatile than net comprehensive income.

scholarly journals THE VALUE RELEVANCE OF INTERNATIONAL ACCOUNTING STANDARD IMPLEMENTATION AND AUDIT QUALITY

2015 ◽  
Vol 3 (3) ◽  
pp. 801
Author(s):  
Hanifa Zulhaimi ◽  
R. Nelly R. Nelly Nur Apandi
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Audit Quality ◽  
Value Relevance ◽  
Balance Sheet ◽  
Fair Value ◽  
International Accounting ◽  
Net Income ◽  
Comprehensive Income ◽  
Other Comprehensive Income

The implementation of international accounting standards in Indonesia has significantly affected financial reporting. It increases information relevance for the investors because a fair value comprehensively represents assets and liabilities of an entity as of the balance sheet date. However, this triggers polemics over the value relevance of International Financial Reporting Standard (IFRS). This can be seen from stock price decline. This study aims to find out the effect of net income and other comprehensive income on stock price and to observe the effect of other comprehensive income moderated by audit quality. Furthermore this study also aims to find out the effect of  the subjectivity of OCI components. Using a sample of 79 companies, the writer analyzes 2014 financial statements derived from Indonesia Stock Exchange. Based on the result, the predetermined hypotheses are unable to prove. Net income is the only variable that affects stock return. Thus it can be concluded that net income has a value relevance for the investors in making economic decisions.

scholarly journals Is Comprehensive Income Superior To Net Income In Equity Valuation? Evidence From The Capital Market Of Kuwait

2019 ◽  
Vol 35 (4) ◽  
pp. 97-108 ◽  
Author(s):  
Mostafa Elshamy ◽  
Husain Y. Alyousef ◽  
Jassem Al-Mudhaf
Keyword(s):  
Financial Reporting ◽  
Value Relevance ◽  
Stock Exchange ◽  
Explanatory Power ◽  
Equity Valuation ◽  
Net Income ◽  
Comprehensive Income ◽  
Valuation Model ◽  
Other Comprehensive Income ◽  
Gains And Losses

The study examines whether comprehensive income numbers reported under International Financial Reporting Standards (IFRS) have value relevance over net income in equity valuation. We use a sample of firms that are listed in Kuwait Stock Exchange from banking, investment, real estate, industrial, basic materials, telecommunications, consumer services, oil & gas and health care sectors during the years 2012-2015.The study applies a methodology used by Collins, Maydew and Weiss (1997) that is based on Ohlson (1995) equity valuation model and Theil (1971) technique to measure and compare the relative and the incremental explanatory power of comprehensive income and net income. The study provides evidence that comprehensive income is not superior to net income in equity valuation. Reporting other comprehensive income gains and losses as elements of the income statement produces a measure of earnings that decreases the explanatory power of the valuation model; decreases the incremental information content of earnings. Other comprehensive income gains and losses when added as an explanatory variable to the valuation model did not enhance significantly its explanatory power.The results we obtained supports the current requirement by the IFRS and US GAAP of deferring other comprehensive gains and losses and contributes to the literature on the value relevance of other comprehensive income gains and losses in emerging capital markets.

scholarly journals Roe in Turbulent Time

2014 ◽  
Vol 62 (2) ◽  
pp. 347-353 ◽  
Author(s):  
Patrizia Gazzola ◽  
Stefano Amelio
Keyword(s):  
Financial Reporting ◽  
Financial Analysis ◽  
Free Market ◽  
Analysis Tool ◽  
Net Income ◽  
Financial Accounting Standards Board ◽  
Comprehensive Income ◽  
Income Statement ◽  
Other Comprehensive Income ◽  
New Research

The aim of the paper is to compare the utility of the net income (NI) and of the comprehensive income for the evaluation of financial performance of the company and to verify whether the total comprehensive income (TCI) is more value relevant than the net income especially in times of crisis (IAS 1, par. 5).The Financial Accounting Standards Board (FASB) has continued to emphasize a financial measure called other comprehensive income (OCI) as a valuable financial analysis tool. The FASB’s goal is to issue guidance to improve the comparability, the consistency and the transparency of financial reporting. Especially in the period of financial crises, OCI measure is also quite helpful to understand the company’s situation. The methodology in the elaboration of this article comes from the author’s previous research, which formed the main part of the overall research. The new research was based on the previous one but we have increased the number of financial statements analyzed by including companies of the free market for the year 2011. In the last part of the paper we show the results of empirical research on the income statement of the Czech companies, which adopted IAS/IFRS principles.

The location of comprehensive income reporting – does it pass the financial analyst revision test?

2018 ◽  
Vol 31 (4) ◽  
pp. 531-550
Author(s):  
Louis Banks ◽  
Allan Hodgson ◽  
Mark Russell
Keyword(s):  
Financial Reporting ◽  
Stock Prices ◽  
Value Relevance ◽  
Financial Analysts ◽  
Net Income ◽  
Financial Analyst ◽  
Content Type ◽  
Forecast Revisions ◽  
Comprehensive Income ◽  
Other Comprehensive Income

Purpose This paper aims to test whether a change in the reporting location of income, and other comprehensive income (OCI) components, in a statement of comprehensive income (SoCI) under International Financial Reporting Standards affects their value-relevance and use by financial analysts. Design/methodology/approach The study tests the associations between CI, OCI, share returns and financial analyst forecast revisions. Findings Results show that comprehensive income is less value-relevant than net income, regardless of reporting location. Changing the reporting location of OCI components to the SoCI does not provide incremental improvement for financial analysts or stock prices. Finally, the paper finds that analysts use OCI components to revise forecasts. Originality/value The paper addresses the question of which OCI components should be reported, and the importance of reporting location. The paper extends the examination of OCI components to financial analysts as expert financial report users.

DİĞER KAPSAMLI GELİR KALEMLERİ İLE İŞLETMENİN PİYASA DEĞERİ ARASINDAKİ İLİŞKİ

2014 ◽  
Vol 1 (3) ◽  
pp. 269
Author(s):  
Serhan Gürkan ◽  
Yasemin Köse
Keyword(s):  
Financial Performance ◽  
Value Relevance ◽  
Net Income ◽  
Comprehensive Income ◽  
Income Statement ◽  
Other Comprehensive Income ◽  
The Difference ◽  
Gains And Losses

Other comprehensive income is the difference between net income as in the Income Statement and comprehensive income, and represents the certain gains and losses of the enterprise not recognized in the Profit or Loss Account. Value relevance of other comprehensive income is under discussion and considering other comprehensive income items all together might be misleading for financial performance. In the view of such information, discussing the value relevance of each other comprehensive income item, judgements are made.

Утицај примене методе удела на перформансе инвеститора // The effect of using the equity method on the performance of the investor

2014 ◽  
Vol 12 (20) ◽  
pp. 59
Author(s):  
Ката Шкарић Јовановић
Keyword(s):  
Financial Reporting ◽  
Joint Venture ◽  
Transition Process ◽  
Economic Recovery ◽  
Real Sector ◽  
The Real ◽  
Joint Management ◽  
Net Assets ◽  
Equity Investments ◽  
Entire Amount

Резиме: Постоји општа сагласност да је повећање инвестиција у реални сектор једна од кључних претпоставки за опоравак привреда земаља обухваћених кризом. У земљама које уз то нису довеле до краја процес транзиције, та потреба се поставља још снажније. Инвеститори могу улагати у оснивање нових друштава, докапитализацију постојећих и оснивање друштава која ће бити под заједничком управом. Финансијско извештавање о улагањима се разликује у зависности од висине учешћа у капиталу друштва. Значајан утицај инвеститору омогућава учешће у капиталу које је више од 20 и мање од 50% капитала и учешће у заједничком подухвату које му обезбеђује да буде страна у заједничкој управи. За утврђивање вредности оваквих учешћа примењује се метода удела. Она се битно разликује од консолидације која се користи за учешћа која су основа контроле по томе како се одређује вредност учешћа и по висини и времену признавања прихода од учешћа. Методе удела, чија примена је обавезна, пружају инвеститорима две важне информације: колики је износ нето имовине придруженог друштва или заједничког подухвата који се односи на учешће и колико износи учешће инвеститора у добитку. Због тога што се готово никад цео износ добитка не додељује власницима, већ један део добити остаје задржан. приходи од учешћа код ове методе готово редовно виши од прилива готовине по основу примљених дивиденди, примена методе удела може неповољно утицати на ликвидност друштва инвеститора.Summary: There is a general agreement that the increase in investment in the real sector is one of the key prerequisites for economic recovery of countries affected by the crisis. In countries which have finished the transition process, this need arises even more strongly. Investors can invest in the establishment of new companies, the recapitalization of existing ones and establishment of companies that will be under the joint management. Financial reporting on investments varies depending on the amount of equity investments in companies. Significant impact for investors provides the share in the capital of more than 20 % and less than 50 % and equity participation in the joint venture provides a participation in the joint management. To determine the value of such share, the equity method is applied . It is very different from the consolidation that is used for the share which is the basis of control in how to determine the value of the share and the amount and timing of recognition of share revenue. The equity method, whose application is mandatory offers investors two important information: what is the amount of net assets of the associate or joint venture relating to share and how high is the share of investors in profit. The entire amount of earnings is almost never allocated to owners, part of the earnings is retained. Income from the participation in this method is almost always higher than the inflow of cash in dividends received, using the equity method may adversely affect the liquidity of the company investors.

scholarly journals Corporate Reporting of Other Comprehensive Income

2018 ◽  
Vol 8 (2) ◽  
pp. 212
Author(s):  
Charles Mulford ◽  
Anna Babinets
Keyword(s):  
Financial Performance ◽  
Annual Report ◽  
Financial Statements ◽  
Net Income ◽  
Income Loss ◽  
Future Earnings ◽  
Corporate Reporting ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
Gains And Losses

In this study, we examine the annual report filings of S&P 100 companies that report other comprehensive income/(loss) over the three-year period of 2013-2015. We seek to gain a deeper understanding of the components of other comprehensive income and to determine if there is a systematic tendency for companies to include more gains or losses in other comprehensive income. Further, we seek to determine which components of other comprehensive income show more unexpected losses than gains and what impact other comprehensive income gains and losses may have on future earnings.We find a systematic tendency for firms to report more losses than gains in other comprehensive income, both in frequency and amount. This result is especially true for investment-related gains and losses, where managements have more discretion in the timing of gain and loss recognition.In terms of their impact on future earnings, we find that 43 companies in the S&P 100 reclassified some component of accumulated other comprehensive income gains and losses to net income over the period 2013- 2015, highlighting the observation that other comprehensive income gains and losses are, in effect, future elements of net income. These results remind analysts and investors that net income does not tell the entire story of a firm’s financial performance. Beyond users of financial statements, regulators, such as the FASB and SEC, may want to reconsider whether items of other comprehensive income should be included in net income.

scholarly journals De invloed van het nieuwe Conceptual Framework op de rapportage over prestaties binnen IFRS

2016 ◽  
Vol 90 (1/2) ◽  
pp. 41-49
Author(s):  
Arjan Brouwer ◽  
Alidus Dannenberg ◽  
Peter Epe
Keyword(s):  
Conceptual Framework ◽  
Financial Reporting ◽  
Accounting Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
International Accounting Standards Board

In de Exposure Draft Conceptual Framework for Financial Reporting blijft de International Accounting Standards Board (IASB) uitgaan van een balansbenadering waarbij baten en lasten worden afgeleid van de mutaties in balansposten. Financiële prestatie wordt niet afzonderlijk gede"nieerd en de IASB reduceert dit tot een presentatievraagstuk gericht op Other Comprehensive Income (OCI) en recycling. Relevante informatieverschaf"ng over prestaties vraagt echter om een prominentere plaats in het nieuwe Conceptual Framework en een meer genuanceerde aanpak voor de ontwikkeling van concepten die de basis kunnen vormen voor standaarden leidend tot relevante informatie over de prestaties van een entiteit. Inzicht in prestaties vraagt in ieder geval om afzonderlijke informatieverschaf "ng over alle relevante attributen van het resultaat en dat is niet mogelijk via slechts een tweedeling tussen resultaten die worden gepresenteerd binnen winst of verlies en resultaten die worden gepresenteerd binnen OCI.

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