Articulation, Profit or Loss and OCI in the IASB Conceptual Framework: Different Shades of Clean (or Dirty) Surplus

Abstract

For guidance on citations see FAQs.

Does Recycling Contribute to Accounting Quality?

“…Hence, our outcomes may be of interest to IFRS developers who may take future actions including the issuing of new standards and/or revisions in existing ones by considering our outcomes to make recycling, as well as net income with recycling, provide higher accounting quality. Moreover, the existing version of recycling is criticized for certain aspects that spring mainly from its complexity as discussed by Tarca et al (2008), Hodgson and Russell (2014) and van Mourik and Asami (2018). Our outcomes may lead to designing future regulations to reduce the complexity of recycling and alleviate other criticisms against recycling.…”

“…Indeed, the complexity of recycling is still discussed by standard setters and practitioners. For instance, double counting (Hodgson & Russell, 2014;van Mourik & Asami, 2018), reduced ability to extract and process information (Tarca et al, 2008) and evidence for earnings management (Arthur et al, 2017) have raised significant concerns for the complexity of recycling. Independent of such concerns, as underscored by Detzen (2016), the concept of income is very deficient without recycling which aims to maintain being the primary performance indicator role of income.…”