Aria Farah Mita, Asyifa Dewi


Abstract. IFRS convergence financial accounting standards require companies in Indonesia to present a comprehensive income statement that includes the presentation of net income, other comprehensive income, and total comprehensive income. And also in 2014, financial accounting standards require reporting of other comprehensive income by including two components, namely: those that will not be reclassified and will be further reclassified to net income. This raises several questions whether reclassification adjustments can increase the usefulness of net income information as an indicator of overall performance. This study aims to investigate two earnings qualities, namely the persistence and value relevance on net income, total comprehensive income and net income without reclassification adjustment components. The research sample is a non-financial company listed in the Indonesia Stock Exchange consisting of 431 companies selected as samples with a period of data collection from 2011 to 2018. There are four hypotheses tested using regression techniques. The results showed several findings, namely net income is more persistent than total comprehensive income; net income is more persistent than net income without reclassification adjustment component; the relevance of net income value is higher than total comprehensive income by using price model and value relevance of net income higher than net income without reclassification adjustments using price model. The results of research on earnings quality in net income, total comprehensive income and net income without reclassification adjustments benefit various parties, such as investors, financial analysts and creditors, prioritizing earnings quality.

Keywords: other comprehensive income; total comprehensive income; persistence; value relevance


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