Acta Univ. Agric. Silvic. Mendelianae Brun. 2014, 62(2), 347-353 | DOI: 10.11118/actaun201462020347

Roe in Turbulent Time

Patrizia Gazzola1, Stefano Amelio2
1 Department of Economics, Insubria University, Via Monte Generoso 71, 21100 Varese, Italy
2 Department of Management, Economics and Quantitative Methods, via Moroni 255, 24127 Bergamo, Italy

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.

Keywords: IFRS, net income, other comprehensive income, total comprehensive income

Prepublished online: May 23, 2014; Published: February 1, 2014  Show citation

ACS AIP APA ASA Harvard Chicago IEEE ISO690 MLA NLM Turabian Vancouver
Gazzola, P., & Amelio, S. (2014). Roe in Turbulent Time. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 62(2), 347-353. doi: 10.11118/actaun201462020347
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. BAMBER, L. S., JIANG, J. (XUEFENG), PETRONI, K., WANG, I. Y., 2010: Comprehensive Income: Who's Afraid of Performance Reporting? The Accounting Review, 85, 1: 97-126. ISSN 0001-4826. DOI: 10.2308/accr.2010.85.1.97 Go to original source...
    2. BARTH, M. E., LANDSMAN, W. R., 2010: How did financial reporting contribute to the financial crisis? European Accounting Review, 19, 3: 399-423. ISSN 0963-8180. DOI: 10.1080/09638180.2010.498619 Go to original source...
    3. BARTŮŇKOVÁ, L., 2012: Are companies in the Czech Republic ready to implement IFRS for SMEs. Acta Univ. Agric. Silvic. Mendelianae Brun., 60, 7: 39-44. ISSN 1211-8516. DOI: 10.11118/actaun201260070039 Go to original source...
    4. BELKAOUI, A., 1992: Accounting Theory. Londres: Academic Press Londres, p. 608. ISBN 978-1844800292.
    5. BHAMORNSIRI, S., WIGGINS, C., 2001: Comprehensive income disclosure. The CPA Journal, 71, 10: 54-56. ISSN 0732-8435.
    6. BIDDLE, G. C., CHOI, JONG-HAG, 2006: Is Comprehensive Income Useful? Journal of Contemporary Accounting & Economics, 2, 1: 1-32. ISSN 18155669. DOI: 10.1016/S1815-5669(10)70015-1 Go to original source...
    7. BOHU©OVÁ, H., 2011: General approach to the IFRS and US GAAP convergence. Acta Univ. Agric. Silvic. Mendelianae Brun., 59, 4: 27-36. ISSN 121-8516. DOI: 10.11118/actaun201159070081 Go to original source...
    8. BRIEF, R. P., PEASNELL, K. V., 1996: Clean surplus: A link between accounting and finance. New York: Garland Publishing, New York, p. 291. ISBN 0815322518.
    9. CAHAN, S., COURTENAY, S, GRONEWOLLER, P., UPTON, D., 2000: Value Relevance of Mandated Comprehensive Income Disclosures. Journal of Business Finance and Accounting, 27, 9: 1273-1301. ISSN 1468-5957. DOI: 10.1111/1468-5957.00356 Go to original source...
    10. DHALIWAL, D., SUBRAMANYAN, K. R., TREZEVANT, R., 1999: Is comprehensive income superior to net income as a measure of firm performance. Journal of Accounting and Economics, 26: 43-67. ISSN 0165-4101. DOI: 10.1016/S0165-4101(98)00033-0 Go to original source...
    11. EUROPEAN COMMISSION, 2012: Green paper shadow banking. Brussels, 19. 3. 2012, COM(2012) 102 final. Available on line: http://ec.europa.eu/internal_market/bank/docs/shadow/green-paper_en.pdf.
    12. FERNANDEZ, F. S., CARRO ARANA, M. M., 2010, Effects Of Comprehensive Income on ROE In a Context of Crisis: Empirical Evidence for IBEX - 35 Listed Companies (2004-2008). International Business & Economics Research Journal, 9, 1: 89-100. ISSN 1535-0754. Go to original source...
    13. GAZZOLA, P., 2012: CSR per scelta o per necessitŕ? Santarcangelo di Romagna (RN): Maggioli Editore, p. 150. ISBN 8838777776.
    14. GAZZOLA, P., AMELIO, S., 2012: One or two statement approach for the Income Statement of Czech companies? Trends Economics and Management, 6, 12: 68-82. ISSN 1802-8527.
    15. GAZZOLA, P., MELLA, P., 2004: From values to "value" - From the creation of the value of firms to sustainable growt. EA 2000 WEB, 3/2004: 1-18. ISSN 2043-5498 available online: http://ea2000.unipv.it/mella/paper%20pdf/2004%20from%20values%20to%20value%20x.pdf.
    16. GONCHAROV, I., HODGSON, A., 2008: The Comprehensive Income in Europe. Social Science Electronic Publishing. Available online: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1313134. Go to original source...
    17. GONCHAROV, I., HODGSON, A., 2011: Measuring and Reporting Income in Europe. Journal of International Accounting Research, 10, 1: 27-59. ISSN 0020-7063. DOI: 10.2308/jiar.2011.10.1.27 Go to original source...
    18. IJIRI, Y., 1975: Theory of Accounting Measurement. Sarasota Florida: American Accounting Association, p. 210.
    19. KANAGARETNAM, K., MATHIEU, R., SHEHATA, M., 2009: Usefulness of comprehensive income reporting in Canada. Journal of Accounting and Public Policy, 28, 4: 349-365. ISSN 0278-4254. DOI: 10.1016/j.jaccpubpol.2009.06.004 Go to original source...
    20. LAUX, C., LEUZ, C., 2009: The crisis of fair-value accounting: Making sense of the recent debate. Accounting, Organizations and Society, 34, 6-7: 826-834. ISSN 0361-3682. DOI: 10.1016/j.aos.2009.04.003 Go to original source...
    21. MATTESICH, R., 2002: The theory of clean surplus and its evolution: Survey and recent perspectives. Energia-International Journal of Philosophy and Methodology of Economics, 1, 2: 9-46. ISSN 1666-5732.
    22. NEAG, R., PĂSCAN, I. D., MASCA, E., 2012: Comprehensive income under IFRS and its impact on financial performance for Romanian listed entities. In: Conference Recent Researches in Applied Economics, WSEAS, Zeljko Panian, 4: 174-178. ISBN 1948-5433.
    23. PROCHÁZKA, D., 2011: Readiness for the Voluntary Adoption of the IFRS by Non-Listed Companies: A Czech Perspective. In: Recent Researches in Applied Economics, WSEAS, Zeljko Panian, 3: 81-86. ISBN 1948-5433.
    24. RAMOND, O., BATSCH, L., CASTA, J-F., 2007: Résultat et performance financičre en norms IFRS: Quel est le contenu informative du comprehensive income? Comptabilité-Contrôle- Audit, Numéro thématique, pp. 129-154. Available on line: http://www.cairn.info/resume.php?ID_ARTICLE=CCA_133_0129#. Go to original source...
    25. REILLY, D., May 12, 2007: Profit as We Know It Could Be Lost With New Accounting Statements. The Wall Street Journal. Available on line: http://online.wsj.com/news/articles/SB117893520139500814.
    26. ROBINSON, L., 1991: The Time Has Come to Report Comprehensive Income. Accounting Horizons, 5, 2: 107-112. ISSN 0888-7993.
    27. STRUHAŘOVÁ, K., ©TEKER, K., OTRUSINOVÁ, M., 2011: Shift to IFRS - what would this mean for Czech Companies. International Journal of Systems Applications, Engineering & Development, 5, 2: 170-177. ISSN 2074-1308.
    28. SVOBODA, P., BOHU©OVÁ, H., 2012: Convergence of IFRS and US GAAP in the field of lease: The impact of new methodological approaches. Acta Univ. Agric. Silvic. Mendelianae Brun., 60, 7: 345-357. ISSN 1211-8516. DOI: 10.11118/actaun201260070345 Go to original source...
    29. ZÜLCH, H., PRONOBIS, P., 2010: The predisctive power of comprehensive income and its individual components under IFRS. HHL Arbeitspapier - HHL working paper, No. 95. Available online: http://www.hhl.de/fileadmin/texte/publikationen/arbeitspapiere/hhlap0095.pdf. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content