IDEAS home Printed from https://ideas.repec.org/a/iif/iifjrn/v28y2013i323p73-96.html
   My bibliography  Save this article

What is the Best Measure of Financial Performance? Comprehensive Income versus Net Income: Evidence from Turkey

Author

Listed:
  • Volkan DEMİR

    (Galatasaray Üniversitesi)

  • Oğuzhan BAHADIR

    (Galatasaray Üniversitesi)

  • Aslı Gül ÖNCEL

    (Galatasaray Üniversitesi)

Abstract

Based on the claim that comprehensive income is a better measure of financial performance than net income, International Accounting Standard No. 1 (IAS 1) requires that companies report comprehensive income in a primary financial statement. In this paper, we test the ability of comprehensive income and net income in terms of Performance measurement by comparing their association with stock returns, operating cash flows and market value of equity. Our results provide evidence on superiority of comprehensive income to net income in terms of performance measurement. This study finds that the claim of IAS 1 is supported in practice. We also examine which components improve comprehensive income’s ability to summarize firm performance. Our results indicate that only “changes in revaluation surplus adjustment” improves the association between comprehensive income and stock returns. This implies that there is no benefit in reporting the separate components of comprehensive income.

Suggested Citation

  • Volkan DEMİR & Oğuzhan BAHADIR & Aslı Gül ÖNCEL, 2013. "What is the Best Measure of Financial Performance? Comprehensive Income versus Net Income: Evidence from Turkey," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 28(323), pages 73-96.
    • Handle: RePEc:iif:iifjrn:v:28:y:2013:i:323:p:73-96
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Melik Ertugrul & Ali Coskun, 2019. "DoesS Recycling Contribute To Accounting Quality," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 33(2), pages 1-18.

    More about this item

    Keywords

    Net Income; Comprehensive Income; Components Of Comprehensive Income; Financial Performance; IAS 1; Usefulness Of Financial Information.;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iif:iifjrn:v:28:y:2013:i:323:p:73-96. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ali Bilge (email available below). General contact details of provider: http://iif.com.tr .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.