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Comprehensive Income In Times Of Crises: Evidence From Spanish Companies

Author

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  • Francisco Sousa Fernández
  • María Mercedes Carro Arana

Abstract

Given the increasing importance of comprehensive income as an indicator of corporate performance internationally, especially since the revision of International Accounting Standard 1 (IAS 1) by the International Accounting Standards Board (IASB) in 2007, in this paper we intend to assess its impact on the more traditional net income during the period 2004-2008 for the select group of the Spanish IBEX-35 listed companies, pursuant to the information disclosed in accordance with said IAS. This will allow us to verify the importance of comprehensive income for the corporate groups at a time of serious financial and economic crisis as was 2008. The non-parametric Wilcoxon Signed-Rank Test was used to perform the corresponding statistic comparisons, as the variables did not conform to normalcy. The results showed a statistically significant impact of comprehensive income on net income for three of the five years that were studied, especially for 2008, when there was a spectacular decline in corporate performance when considering the impact of the first on the second. This confers more informational relevance to comprehensive income, being much more in tune with market reality than traditional net income.

Suggested Citation

  • Francisco Sousa Fernández & María Mercedes Carro Arana, 2010. "Comprehensive Income In Times Of Crises: Evidence From Spanish Companies," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 4(3), pages 89-100.
    • Handle: RePEc:ibf:gjbres:v:4:y:2010:i:3:p:89-100
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    References listed on IDEAS

    as
    1. Dhaliwal, Dan & Subramanyam, K. R. & Trezevant, Robert, 1999. "Is comprehensive income superior to net income as a measure of firm performance?1," Journal of Accounting and Economics, Elsevier, vol. 26(1-3), pages 43-67, January.
    2. Hirst, DE & Hopkins, PE, 1998. "Comprehensive income reporting and analysts' valuation judgments," Journal of Accounting Research, Wiley Blackwell, vol. 36, pages 47-75.
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    More about this item

    Keywords

    Comprehensive Income; Net Income; Times of Crises; Spanish Companies (IBEX-35);
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

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