Abstract
This study aims to examine the effect of net income and other comprehensive income on the total of future’s comprehensive income with attribution of earning as a moderating variable. It also tests whether comprehensive income is more persistent than Net Income and whether re-measurement of the defined program is the highest predictive power for future CIs. The dependent variable was Comprehensive Incomet+1, and the independent variables were Net Income and Other Comprehensive Income. Data sources were financial statements 2014-2018 of 367 companies listed in Indonesia Stock Exchange. The empirical evidence were 1).Net income and other comprehensive income can predict future comprehensive income, 2). The CI attribution can improve the ability of NI and OCI in predicting future CI. 3). Net income is more persistent than other comprehensive income, 4). The defined program is the highest predictive power for future CIs.
Highlights
Before 2012 Indonesian accounting standards referred to US-GAAP accounting principles, and after 2012 turned to International Financial Reporting Standards (IFRS)
A study conducted by Shi, Wang, & Zhou (2017) concluded that the purpose of moving the location of other comprehensive income (OCI) presentation from balance sheet equity to the income statement is to increase the transparency of financial statements and the predictive power of earnings for an estimated stock price
The results of this study provide input for users of financial statements regarding the benefit of changing the format of the presentation of the income statement, especially the value of relevance for information about other comprehensive income (OCI) and the attribution of earnings to owners
Summary
Before 2012 Indonesian accounting standards referred to US-GAAP accounting principles, and after 2012 turned to International Financial Reporting Standards (IFRS). A study conducted by Shi, Wang, & Zhou (2017) concluded that the purpose of moving the location of OCI presentation from balance sheet equity to the income statement is to increase the transparency of financial statements and the predictive power of earnings for an estimated stock price. This is caused by the fact that users of financial statements use OCI in financial analysis for decision making Elbakry, Nwachukwu & Abdou (2017) concluded that the ability of accounting information in predicting future earnings increased after converging with IFRS (compared to before while still using the previous standard)
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