Quality Between Net Income and Total Comprehensive Income in The Application of IFRS: An Empirical Study Amalia Rizki and Octarina Dwi Megayanti
Universitas Airlangga
Abstract
This study aims to investigate the quality of total comprehensive income relative to net income, prepared in accordance with International Financial Reporting Standards (IFRS) for listed companies in Indonesia Stock Exchange during 2011-2014. In order to compare the quality of the net income and the total comprehensive income, this study focus on two earnings attributes including value relevance and predictive value. This research used the combination of time series and cross sectional data. While test of this research used Ordinary Least Squares (OLS) and multiple linear regression. The findings indicated that net income is more value relevant than total comprehensive income in explains the market value and stock return of the entity. Also, net income is more predictive than total comprehensive income in predicting the future operating cash flow and future income.
Keywords: earnings quality, value relevance, predictive value, IFRS regulation, net income, total comprehensive income
