Comprehensive Income Research Articles

The concept of other comprehensive income, its essence and composition, reflection in the financial statements

The concept of other comprehensive income, its essence and composition, reflection in the financial statements

Other Comprehensive Income and Equity

Other Comprehensive Income and Equity

Accounting and tax accounting for the accrual of depreciation of fixed assets and ways of convergence

Research background: As you know, one of the main accounting principles that determine the methodology for assessing the facts of economic life is business continuity. Compliance with this principle by commercial organizations is associated with many factors, one of which is their ability to provide funding for the continuation and development of activities. Carrying out activities for the acquisition of new or modernization and technical re-equipment of existing fixed assets implies one-time cash costs. That is why one of the main sources of financing for updating and modernization and technical re-equipment of fixed assets is depreciation deductions. Depreciation deductions for fixed assets in accounting and tax accounting are calculated differently, which determines the relevance and need for a clear study of accounting procedures in the field of their accounting. Purpose of the article: The purpose of the article is to conduct a comparative analysis of the procedure for calculating and accounting for depreciation deductions for fixed assets in accounting and tax accounting and to study ways to bring them closer together. Methods: Methods of comparative analysis, induction and deduction were used in the article. Findings & Value added: The current rules for calculating depreciation deductions for fixed assets and their reflection in accounting and reporting do not provide a reliable reflection of the facts of economic activity of the enterprise. And this in turn leads to a misunderstanding by the respective users of the contents of the statement of financial position and the statement of profit or loss and other comprehensive income and the essence of depreciation itself.

Learning about Homelessness Using Linked Survey and Administrative Data

Official poverty statistics and even the extreme poverty literature largely ignore people experiencing homelessness. In this paper, we examine the characteristics, labor market attachment, geographic mobility, earnings, and safety net utilization of this population in order to understand their economic well-being. This paper is the first to examine these outcomes at the national level using administrative data on income and government program receipt. It is part of the Comprehensive Income Dataset project, which combines household survey data with administrative records to improve estimates of income and related statistics. Specifically, we use restricted microdata from the 2010 Decennial Census, which enumerates both sheltered and unsheltered homeless people, the 2006-2016 American Community Survey (ACS), which surveys sheltered homeless people, and longitudinal shelter-use data from several major U.S. cities. We link these data to longitudinal administrative tax records as well as administrative data on the Supplemental Nutrition Assistance Program (SNAP), veterans’ benefits, Medicare, Medicaid, housing assistance, and mortality. Our approach benefits from large samples that offer a guide to national homelessness patterns and allow us to compare estimates between data sources, including the Department of Housing and Urban Development (HUD)’s point-in-time (PIT) counts. By shedding light on issues of data linkage and survey coverage among homeless people, this paper contributes to efforts to better incorporate this hard-to-survey population into income and poverty estimates. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Дослідження сучасного стану та тенденцій розвитку логістичної діяльності машинобудівних підприємств

The current state and trends in developing logistics activities at machine-building enterprises is studied through evaluating the efficiency of financial flows. It is noted that studying the current state and trends in the logistics activities at machine-building enterprises is a necessary condition for the revival of mechanic engineering in our country. It is noted that the machine-building industry has specific features in management, which are associated with high costs for raw materials, energy, transportation, and labor resources. Mostly, products of machine-building enterprises have a fairly long usage (consumption) cycle, and are quite large, so their sale causes problems during periods of economic crisis, in contrast to, for example, food products. It is established that for the industry to undergo sustainable development, it needs to attract capital investments. The general problem with the level of financing, including the machine-building industry, negatively affects the prospects for reorganizing the production cycle, involving innovative technologies, introducing resource- and energy-saving processes in production, complying with environmental management. It is this set of conditions that is the key to making products of Ukraine’s machine-building industry attractive for global market consumers, and therefore, to increasing financial flows. As a result of the study, a methodological approach to evaluating the logistics activities at machine-building enterprises by selected indices of financial logistics is suggested, where the indices can be calculated on the basis of the annual financial statements of enterprises as for their balance (statement of financial position) and financial results (statement of comprehensive income), making it possible to identify both factors influencing the results of the economic activity of machine-building enterprises, and the degree of this influence. The calculated values of the relative efficiency ratios of financial logistics in managing accounts receivable and payable related to product flows can serve as input data to build a mathematical model for forecasting the efficiency of logistics activities at machine-building enterprises in Ukraine

Virtual Power Plant Participates in the Two-Level Decision-Making Optimization of Internal Purchase and Sale of Electricity and External Multi-Market

The power industry’s participation in carbon trading and green certificate trading is an effective market-based approach to solve the negative externalities of power production. In this paper, the Virtual power plant (VPP) is taken as the aggregator to coordinate and optimize the carbon trading and green certificate trading between the power purchasing end and the power selling end, so as to achieve the goal of maximizing the comprehensive benefits of the VPP. Firstly, the operation model of VPP aggregating various types of distributed energy and different users participating in green certificate market and carbon trading market is analyzed; Secondly, a two-level collaborative optimization model of VPP participating in power purchase and sale transaction and green certificate transaction is constructed. On the one hand, the cost of power purchase and green certificate acquisition is minimized by combining various types of power generation resources at the power purchase end. On the other hand, the power purchased is distributed among various types of users at the power sale end, so as to maximize the power sale income and green certificate sales income. On this basis, the VPP as a whole participates in the electric energy market, carbon trading market and green certificate trading market to maximize the comprehensive income. Finally, a VPP is taken as an example to verify the economy and effectiveness of the proposed model in this paper.

Urban Green Development towards Sustainability in Northwest China: Efficiency Assessment, Spatial‐Temporal Differentiation Characters, and Influencing Factors

For achieving the sustainable development goals, green development has been raised to a high position for cities in China. The economic development in Northwest China is slow, the ecological environment is fragile, and the mineral resources are rich. Only through green development can we realize the comprehensive income of regional production development, rich life, and good ecology. This paper measures the green development efficiency of 30 prefecture‐level cities in Northwest China by using DEA‐SBM model of unexpected output, explores the differences and causes of green development efficiency from the perspective of time and space through convergence coefficient, coordination matrix, GIS, and other methods, and empirically tests the impact of industrial structure, technological progress, and other driving factors on green development efficiency by using panel Tobit model. The results show that, on the whole, the efficiency of green development in Northwest China is low, path dependence is serious and unbalanced, the coordinated development effect of different regions is weak, and the spillover effect of core urban agglomerations has not been effectively exerted; from the perspective of driving factors, economic development, population density, traffic situation, and education investment can significantly improve the efficiency of urban green development, and the second is that the proportion of industries significantly hinders the improvement of green development efficiency, while the impact of scientific and technological innovation is not significant. Based on the empirical results, this paper believes that the harmonious development of natural environment and economic society can be realized only by improving the coordinated development effect among cities, implementing the optimization and upgrading of industrial structure, introducing excellent talents, and promoting the technological upgrading.

The Anti-Poverty, Targeting, and Labor Supply Effects of the Proposed Child Tax Credit Expansion

The proposed change under the American Families Plan (AFP) to the Tax Cuts and Jobs Act (TCJA) Child Tax Credit (CTC) would increase maximum benefit amounts to $3,000 or $3,600 per child (up from $2,000 per child) and make the full credit available to all low and middle-income families regardless of earnings or income. We estimate the anti-poverty, targeting, and labor supply effects of the expansion by linking survey data with administrative tax and government program data which form part of the Comprehensive Income Dataset (CID). Initially ignoring any behavioral responses, we estimate that the expansion of the CTC would reduce child poverty by 34% and deep child poverty by 39%. The expansion of the CTC would have a larger anti-poverty effect on children than any existing government program, though at a higher cost per child raised above the poverty line than any other means-tested program. Relatedly, the CTC expansion would allocate a smaller share of its total dollars to families at the bottom of the income distribution—as well as families with the lowest levels of long-term income, education, or health—than any existing means-tested program with the exception of housing assistance. We then simulate anti-poverty effects accounting for labor supply responses. By replacing the TCJA CTC (which contained substantial work incentives akin to the EITC) with a universal basic income-type benefit, the CTC expansion reduces the return to working at all by at least $2,000 per child for most workers with children. Relying on elasticity estimates consistent with mainstream simulation models and the academic literature, we estimate that this change in policy would lead 1.5 million workers (constituting 2.6% of all working parents) to exit the labor force. The decline in employment and the consequent earnings loss would mean that child poverty would only fall by 22% and deep child poverty would not fall at all with the CTC expansion.

On the horizontal inequity effect of the erosion of the pit base: the case of Italy

This paper deals with the erosion of the personal income tax (PIT) base, a wellknown phenomenon that is undermining the redistributive features of the Italian tax system. Several sources of income previously subject to progressive marginal tax rates are now taxed under substitute proportional tax regimes or are entirely exempt from taxation. The existing tax system as of the 2019 tax year is compared with three alternative policy scenarios. First, a comprehensive income tax scheme where all income components are included in the PIT base is examined. Second, a flatrate personal income tax scheme with a drastic reduction in revenue is considered. Third, a further flat-rate tax scheme with a neutral effect on revenue is simulated. The focus of the comparison is on the unequal tax treatment of close equals. Decomposition approaches to the study of classical horizontal inequity are applied and discussed (van de Ven et al., 2001; Duclos et al., 2003; Urban and Lambert, 2008). The findings show that the erosion of the PIT base has increased the level of horizontal inequity of the tax system only negligibly, and that limited benefits would be obtained if a flat personal income tax were to be adopted.

Learning About Homelessness Using Linked Survey and Administrative Data

Official poverty statistics and even the extreme poverty literature largely ignore people experiencing homelessness. In this paper, we examine the characteristics, labor market attachment, geographic mobility, earnings, and safety net utilization of this population in order to understand their economic well-being. This paper is the first to examine these outcomes at the national level using administrative data on income and government program receipt. It is part of the Comprehensive Income Dataset project, which combines household survey data with administrative records to improve estimates of income and related statistics. Specifically, we use restricted microdata from the 2010 Decennial Census, which enumerates both sheltered and unsheltered homeless people, the 2006-2016 American Community Survey (ACS), which surveys sheltered homeless people, and longitudinal shelter-use data from several major U.S. cities. We link these data to longitudinal administrative tax records as well as administrative data on the Supplemental Nutrition Assistance Program (SNAP), veterans’ benefits, Medicare, Medicaid, housing assistance, and mortality. Our approach benefits from large samples that offer a guide to national homelessness patterns and allow us to compare estimates between data sources, including the Department of Housing and Urban Development (HUD)’s point-in-time (PIT) counts. By shedding light on issues of data linkage and survey coverage among homeless people, this paper contributes to efforts to better incorporate this hard-to-survey population into income and poverty estimates.

The Anti-Poverty, Targeting, and Labor Supply Effects of Replacing a Child Tax Credit with a Child Allowance

The proposed change under the American Families Plan (AFP) to the Tax Cuts and Jobs Act (TCJA) Child Tax Credit (CTC) would increase maximum benefit amounts to $3,000 or $3,600 per child (up from $2,000 per child) and make the full credit available to all low and middle-income families regardless of earnings or income. We estimate the anti-poverty, targeting, and labor supply effects of the expansion by linking survey data with administrative tax and government program data which form part of the Comprehensive Income Dataset (CID). Initially ignoring any behavioral responses, we estimate that the expansion of the CTC would reduce child poverty by 34% and deep child poverty by 39%. The expansion of the CTC would have a larger anti-poverty effect on children than any existing government program, though at a higher cost per child raised above the poverty line than any other means-tested program. Relatedly, the CTC expansion would allocate a smaller share of its total dollars to families at the bottom of the income distribution—as well as families with the lowest levels of long-term income, education, or health—than any existing means-tested program with the exception of housing assistance. We then simulate anti-poverty effects accounting for labor supply responses. By replacing the TCJA CTC (which contained substantial work incentives akin to the Earned Income Tax Credit) with a universal basic income-type benefit, the CTC expansion reduces the return to working at all by at least $2,000 per child for most workers with children. Relying on elasticity estimates consistent with mainstream simulation models and the academic literature, we estimate that this change in policy would lead 1.5 million workers (constituting 2.6% of all working parents) to exit the labor force. The decline in employment and the consequent earnings loss would mean that child poverty would only fall by 22% and deep child poverty would not fall at all with the CTC expansion.

PREDICTIVE VALUE OF OTHER COMPREHENSIVE INCOME: EVIDENCE FROM ASEAN

This paper examines the predictive value of other comprehensive income and its disclosure in ASEAN. Unlike value relevance, the predictive value of other comprehensive income has not been extensively addressed in the literature. We conduct the first study examining the predictive value of other comprehensive income and its disclosure to prove that not only fair value as relevant information, but also other comprehensive income reflecting the changes of fair value. We use hand-collected data taken from the financial reports. This study employs a panel regression model to test the ability of other comprehensive income and its disclosure to predict firms’ future performance. The results confirm that as relevant information, other comprehensive income and its disclosure have predictive value. In addition, other comprehensive income which interacted with disclosure of other comprehensive income resulted predictive value only for one year ahead. Furthermore, other comprehensive income components which belongs to fair value level 1 and 2 have predictive value because it uses market-based input. Meanwhile, other comprehensive components which belong to fair value level 3 only have predictive value for one year ahead because it uses unobservable input that can ­­lead to higher subjectivity.

Decision Usefulness of Net Income versus Comprehensive Income: Case of Financial Firms in Malaysia

Research aims: This paper aims at investigating the decision usefulness, namely predictive power and value relevance, of Net Income (NI) in comparison with Comprehensive Income (CI) for financial firms in Malaysia. Design/Methodology/Approach: Panel data analysis techniques are used. An unbalanced panel data is obtained from 29 financial firms listed in Malaysia from 2012 to 2017. Research findings: Pertaining to predictive power tests, there is not enough evidence to conclude that one accounting metric has better predictive power than the other. In terms of value relevance, the results show that NI is better than CI using both Price and Return models. This indicates that NI is more decision useful to investors than CI for financial firms in Malaysia. Originality: This study expands on the literature on the decision usefulness of NI in comparison with CI for financial firms in the context of an emerging economy with a smaller and less efficient market in the Asian region such as Malaysia. This study is related to fair value accounting (FVA) where it is still underexplored in the Malaysian setting. Hence, this study may provide some insights to the financial statements’ users in understanding the effects of FVA on reported earnings in Malaysia where such evidence is lacking. Practitioner/Policy implications: The findings may assist investors in making better investment decisions in the Malaysian market. This study may benefit the academicians by offering a body of knowledge as a reference for furthering and broadening their research on this area in other jurisdictions. The paper may also be relevant to the standard setters, regulators, and policymakers as it offers empirical evidence on the decision usefulness of accounting information disclosure in the context of an emerging country such as Malaysia.

PENYAJIAN LAPORAN KEUANGAN ENTITAS BERORIENTASI NONLABA BERDASARKAN ISAK 35 PADA MASJID BAITUL HAADI

Mosque is an entity that aims not for profit (non-profit entity), so that financial accountability becomes an important aspect for mosques. Good accountability can be realized by presenting the mosque's financial reports in accordance with generally accepted accounting standards. The standard governing the financial reporting of non-profit entities is the Interpretation of Financial Accounting Standards No. 35 (ISAK 35). By implementing ISAK 35 in the presentation of mosque financial reports, interested parties will be able to assess the financial performance of the mosque. The object of this research is Mosque Baitul Haadi. Data were collected through a series of interviews and observations. Until now, Mosque Baitul Haadi only presented financial reports as far as cash in and cash out. This study aims to compile the financial statements of Mosque Baitul Haadi based on ISAK 35 using Microsoft Excel application tools. The financial statements that will be produced are the statements of financial position, comprehensive income statements, cash flow statements and notes to financial reports.

Value Relevance of Comprehensive Income for the Canadian Market*

ABSTRACTThe value relevance of comprehensive income (CI) compared to net income (NI) remains unresolved. We look at this issue in the Canadian market, using association methods to determine the value relevance of reporting CI and other comprehensive income (OCI) components for stock prices and returns. The sample consists of all the firms in the S&P/TSX Composite Index that prepared their financial statements according to Canadian standards or International Financial Reporting Standards (IFRS) over the 2008–2016 period. Although we find no evidence that CI is more value relevant than NI for stock prices and returns, we note that some OCI components are incrementally value relevant beyond NI for both amounts. In addition, financial services firms differ from other companies in terms of the relationships between some of their OCI components and prices or returns, with such firms even driving some relationships. Relationships between OCI components and prices or returns are also affected when data from the financial crisis period are excluded, with some relationships even changing after IFRS adoption. These results inform Canadian standard setters and financial statement users that OCI components are decision useful for the Canadian market.

Other Comprehensive Income and Its Tax Implications in Indonesia

Other Comprehensive Income and Its Tax Implications in Indonesia

Banks’ Discretion Over the Debt Valuation Adjustment for Own Credit Risk

During our 2007 to 2015 sample period, firms recorded unrealized gains and losses on fair-valued liabilities attributable to changes in the firms’ own credit risk, referred to as the debt valuation adjustment (DVA), in earnings. Various parties criticized the inclusion of DVA in earnings as counterintuitive and manipulable. Using a small but comprehensive sample of European banks reporting nonzero DVA during this period, we decompose banks’ DVA into a normal portion explained by economic factors (e.g., changes in bond yield spreads) and an abnormal portion (the residual). Controlling for abnormal loan loss provisions (LLP) and realized securities gains and losses (RGL), we find that banks’ abnormal DVA is negatively associated with their premanaged earnings, consistent with banks exercising discretion over DVA to smooth earnings. We further find that banks that record larger LLP or RGL or that have histories of using LLP or RGL to smooth earnings are less likely to exercise discretion over DVA. These findings obtain in the financial crisis but not afterward. Collectively, our findings suggest that banks exercised discretion over DVA substitutably with discretion over LLP and RGL during the crisis. With the caveat that our analysis is limited by a small sample and the inherent difficulties of DVA decomposition, our findings have implications for how bank regulators and investors should interpret banks’ reported DVA, particularly in stress periods such as the crisis, and they provide support for the International Accounting Standards Board and Financial Accounting Standards Board’s (FASB) decisions to require firms to record DVA in other comprehensive income starting in 2018.

Value Relevance of net income, other comprehensive income, and comprehensive income in Brazil

This paper uses the Ohlson Model to analyze whether Net Income (NI), Other Comprehensive Income (OCI), and Comprehensive Income (CI) are value relevant for market value and the return of shares of publicy-traded Brazilian companies. To maximize the robustness of the results, we inserted the following control variables for each model: equity per Share (EqPS), Size (S), Industry (I), EBITDA per Share (EbPS), Revenue per Share (RePS), Liquidity (L), and Gross Domestic Product Growth (GDPG). The control variables S, RePS, and GDPG were significant for the three models related to the value of the company. The control variables EqPS, EbPS, RePS, and L, on the other hand, were only significant for the three models related to stock returns. Our main variables (NI, OCI, and CI) were found to be statistically significant in five of the six regression models after data analysis in a fixed effect panel using robust standard errors. However, only the variables NI and CI were considered to be relevant in the expected direction, meaning that they offered a positive contribution in explaining the value of the company.

Pengakuan Aset Tak Berwujud Dan Perbandingan Metode Garis Lurus Dengan Metode Saldo Menurun Dalam Menentukan Pajak Penghasilan

The purpose of this study is to analyze the recognition of intangible assets and to compare the straights line method with the declining balance method in determining income tax. The method in this research is evaluation and qualitative research type. From the results of the research, it was identified that the company has intangible assets in the form of a personnel information system worth IDR 35,000,000, all costs used to obtain the system are recognized as intangible assets according to the criteria for intangible assets according to PSAK 19. Amortization calculation results in 2019 using the straight-line method amounted to IDR 8,750,000. So that the commercial comprehensive income generated is IDR 27,425,574,392. Meanwhile, the declining balance method resulted in amortization of IDR 17,500,000 and the resulting comprehensive commercial profit of IDR 27,416,824,392. After the fiscal reconciliation was carried out, the Income Tax amounted to IDR 6,285,027,465 using a straight line as the amortization calculation. Meanwhile, Income Tax with amortization costs uses the declining balance method of IDR 6,282,964,965. There is a tax savings of IDR 2,062,500 if you use the Decreasing Balance Method. So that the declining balance method is very suitable to use when economic conditions are sluggish like today due to the impact of Covid-19. The tax savings can be used to increase the company's capital to run business operations.

Capital, an Elusive Tax Object and Impediment to Sustainable Taxation

Sustainable taxation requires stability and predictability. Sustainable taxation is a tax or taxes that collect sufficient revenue to support the governmental goods and services the society needs and wants. The taxes must provide for: 1) even-handedness—something akin to horizontal equity; 2) distributional fairness—aconcept emerging from notions of vertical equity; 3) transparency in application so that the populace understands and accepts the tax and the need for it; and 4) collection mechanisms that do not favor some societal groups, especially those with resources to secure creative tax advisors, over others who lack the resources. Narrow base taxes—fuel, alcohol, tobacco—cannot meet these criteria and the broad base taxes currently applicable—value added, payroll, and income—alsofail to meet one or more of the criteria. While specialized taxes like environmental taxes and sin taxes—alcohol, tobacco—serve useful regulatory functions and may achieve their behavioral objectives in part, they do so primarily by increasing the cost of engaging in the undesirable behavior and pricing some actors out of the activity. Using a pricing rather than a direct regulatory mechanism, the specialized taxes change the conversation from social rejection of the behavior to acceptance as long as the actor is willing and able to pay the high price. Is it all right to pollute if one pays to do so? Direct regulation might prove less regressive and less likely to be viewed as simply a matter of price and more as a matter of societal mainstream and commitment to addressing a problem.
 To secure sustainable taxation this Article recommends a non-preferential income tax on a comprehensive income tax base. While by no means a new idea, the growing resource disparity between affluent individuals and individuals with limited resources renders the idea of a non-preferential income tax on all income including realized and unrealized gains all the more compelling. This Article outlines a method for transition to the recommended tax base from the current realization-based tax base and suggests that in limited cases a taxpayer might defer payment of tax on some items of income but not defer inclusion of the items in the tax base. As it describes its tax plan, this Article reflects on the objectives and shortcomings of the targeted taxes and purposive tax base modifications that have proliferated during the 20th century. This Article concludes that a non-comprehensive tax base may accomplish narrow objectives successfully but is unlikely to become functionally sustainable to support essential governmental goods and services. Neither are targeted taxes and purposive tax base modifications fully justifiable. They are likely to distribute tax burdens unevenly among taxpayers without any compelling reason for preferring some taxpayers to others. The narrowness of the base of such taxes frequently leads to regressive tax incidence.