Performance Reporting Choices after the Adoption of IAS 1 Revised: Comparative Evidence from Europe and the USA

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Abstract

Motivated by the issuance of International Accounting Standard 1 revised, this paper investigates reporting choices on the Comprehensive Income of listed companies from Europe and the USA. This research aims at verifying the effects of the requirements issued by the International Accounting Standard 1 revised in improving performance evaluation towards the convergence between European and American accounting standards, Our research tests the correlation between the choice of Income Statement format and different variables, such as the size of companies, sign of Other Comprehensive Income, leverage and status of a US listing. This paper also evaluates the effect of Comprehensive Income on financial performance by calculating the Return On Equity. The main findings underline that the format of Income Statement and the “location” of the Comprehensive Income can be interpreted both as factors that can influence the choices of investors and as a tool available to managers to alter the communication of the firm's performance choices.Keywords: Comprehensive Income; convergence; performanceJEL Classifications:  M10, M16, M40, M41

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Author Biographies

Federica Doni, University of Milano-Bicocca

She is an Assistant Professor in Business Administration at the Department of Business Administration, Finance, Management & Law, University of Milano-Bicocca. She teaches Financial Accounting and Business Administration. Her main research interests includes International Accounting, Intangibles and Intellectual Capital, Performance Measurement Models, Integrated and Sustainability Reporting, Corporate Governance, Accounting History, Business Valuation. She attends as a speaker at many international conferences, such as EIASM workshops and the annual EAA congress. She is a member of the “European Accounting Association” (EAA), of the Centre for Social & Environmental Accounting Research (CSEAR, University of St. Andrews, UK) and of the <IR> Academic Network (IIRC, London, UK).

Silvia Rossetti, University of Pisa

She is a Phd graduate at the University of Pisa. Her main research interests are: International Accounting, IFRS principles. Performance Measurement Models. She attended as a speaker at   international conferences i.e. the annual EAA congress and she has written and published some articles in journals both international and national. She is a member of the “European Accounting Association” (EAA).

Roberto Verona, University of Pisa

Roberto Verona received his degree in business economics in 1998 with top grades. In 2003, he received his PhD from the University of Pisa's Faculty of Economics and become a business administration and management researcher at this same university. In 2011 he became Associate Professor of Business Administration. His teaching activities include master degrees and vocational training courses. His main research interests are international accounting, financial statement policies, extraordinary operations, gambling and accounting history. He is a member of the “European Accounting Association” (EAA).

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Published

2017-08-23

How to Cite

Doni, F., Rossetti, S., & Verona, R. (2017). Performance Reporting Choices after the Adoption of IAS 1 Revised: Comparative Evidence from Europe and the USA. International Journal of Economics and Financial Issues, 7(4), 558–574. Retrieved from https://econjournals.com/index.php/ijefi/article/view/5053

Issue

Vol. 7 No. 4 (2017)

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