Effects Of Comprehensive Income On ROE In A Context Of Crisis: Empirical Evidence For IBEX-35 Listed Companies (2004-2008)

Abstract

Comprehensive income is becoming increasingly important as an indicator of corporate performance at an international level [SFAS 130 by the FASB (1997) and NIC 1 by the IASB, revised in 2007, among others]. Given this importance, this paper intends to assess its impact on the Return on Equity (ROE), as opposed to the more traditional net income, for the period 2004-2008 for the select group of the Spanish IBEX-35 listed companies. Moreover, working on this period will also allow us to verify the incidence of comprehensive income on the ROE within a context of economic crisis, especially for the year 2008, with a large recession and steep drops in the stock markets. For this empirical study, we took as reference the pertinent information disclosed in the Consolidated Annual Reports of these listed companies, formulated pursuant to the IFRS by the IASB, especially pursuant to IAS 1.The non-parametric Wilcoxon Signed-Rank Test was used to perform the corresponding statistic comparisons, as the variables in certain years did not conform to normalcy. The results of our paper show a statistically significant impact of the ROE calculated pursuant to comprehensive income as opposed to the ROE determined pursuant to the net income. This was evidenced for three of the five years that were studied, especially for 2008, when there was a spectacular decline in the ROE calculated pursuant to the comprehensive income as opposed to that calculated pursuant to the net income. We consider this could be a contribution to the international debate regarding the need to include other measurements of corporate performance that are broader than the traditional net income in certain ratios of the fundamental analysis. This could represent the basis for adopting financial decisions that are much more in tune with the reality of the market.

Roe in Turbulent Time

“…We examine the consolidated fi nancial statements 2011, published online, to be prepared according to the IAS 1 revised in 2007. We have reviewed current literature and in this paper we assess the impact of CI on the more traditional NI during the period 2011 for the Czech Republic companies, pursuant to the information disclosed in the Consolidated Financial Statements in accordance with the IFRS and in particular with the IAS 1 revised 2007 (Fernandez and Carro Arana, 2010).…”

“…In the statement of comprehensive income, the result is an income that includes the NI with changes in value of assets that are recognized only to the equity: OCI (Goncharov and Hodgson, 2008;Fernandez and Carro Arana, 2010). In this way, the performance is not only potential but is enlarged to all the elements that meet the defi nition of income and expenses.…”

Borsa İstanbul Şirketlerinin Kapsamlı Gelir Raporlama Uygulamaları Üzerine Bir Araştırma

“…Yani, diğer kapsamlı gelir unsurları özkaynaklarda artışa neden olan sermaye ve kâr yedeği niteliğindeki kâr ya da zararda muhasebeleştirilmeyen gelir ve gider (yeniden sınıflandırma düzeltmeleri de dâhil olmak üzere) kalemlerini kapsamaktadır (Gökgöz, 2013). Toplam kapsamlı gelir ise diğer kapsamlı gelir unsurlarının geleneksel gelir tablosunda yer alan dönem kârına eklenmesi sonucunda elde edilen tutar olarak hesaplanmaktadır (Fernández ve Arana, 2010).…”

“…Bu çalışmalardan bazıları kapsamlı gelir tutarı ile piyasa değeri arasındaki ilişkiyi ele almıştır (Cahan vd., 2000;Dastgir ve Valeshani, 2008;Kanagaretnam vd., 2009;Kubota vd., 2011;De Cristofaro ve Falzago, 2014). Uluslararası literatürde yer alan diğer bazı çalışmalar ise toplam kapsamlı gelir ve geleneksel dönem kârının ve toplam kapsamlı gelir ve geleneksel dönem kârı baz alınarak hesaplanan kârlılık oranlarının istatiksel olarak farklılaşıp farklılaşmadığını incelemiştir (Kreuze ve Newell, 1999;Fernández ve Arana, 2010;Ferraro, 2011;Frendzel ve Szychta, 2013;De Cristofaro ve Falzago, 2014;Ngmenipuo ve Issah, 2014;Păşcan, 2014;Marchini ve D'este, 2015;Ngmenipuo ve Issah, 2015). Kreuze ve Newell (1999) Ngmenipuo ve Issah (2015) gerçekleştirdikleri çalışmada Gana borsasında işlem gören işletmelerin diğer kapsamlı kalem tutarlarının performans ölçütlerine etkisini t-testi ile analiz etmişlerdir.…”

“…Zarardan kâra 1 1,9 2 3,8 1 1,9 2 3,8 3 5,7 0 0,0 6 11, 3 5 9,4 2 (Fernández ve Arana, 2010;Çetinoğlu ve Tutkavul, 2013;Marchini ve D'este, 2015;Ngmenipuo ve Issah, 2015…”