|
ISSN: 2344 - 102X
ISSN-L: 2344 - 102X
Our journal is currently indexed in the following databases:
|
| |
Article from Volume 1, Number 1, Year 2013| COMPREHENSIVE INCOME, AN HISTORICAL PERSPECTIVE. THE DEVELOPMENT OF PROPRIETORSHIP AND ENTITY THEORIES, AN INTERNATIONAL APPROACH | 
Download | | Author(s): Andrea Cilloni, Marco Angelo Marinoni, Barbara Merino | | DOI: 10.4316/EJAFB.2013.112 | | Abstract: IASB considers that the concept of Comprehensive Income (C.I.) successfully answers financial
statements users' needs. In June 2011, IASB and FASB separately issued convergent amendments
on the presentation of O.C.I. The Boards also agreed two options to present items of O.C.I. This
paper argues that the opportunity should now be taken to carry out further research in order to
validate this new approach as being in accordance with existing accounting principles. The IASB and the FASB working jointly on comprehensive income has rekindled the heated twentieth century debate over proprietary versus entity theory. We examine that historic debate for the purpose of better understanding the current issues related to income determination. We suggest that as long as proprietary theory (Sprague, 1908, Hatfield, 1909, Canning, 1929) more recently residual
equity theory (Sprouse, 1958) and contrast it with entity theory (Paton and Littleton, 1930. We argue that proprietary theory with its focus on measuring stockholder remains dominant. We then examine why we do not think that comprehensive income will not be adequate to meet users' needs
in a global economy.
We then discuss the current IASB standard for measuring comprehensive income and discuss the advantage that entity theory affords in a global economy. We then examine the contemporary literature about "disclosure" (Beretta and Bozzolan, 2004; Hutton, 2004; Beattie and McInnes,
2006) and "value relevance" (Biddle and Choi, 2006; Ernstberger, 2008; Barton et al., 2010). Our objective is to offer an alternative measure of C.I. based on economic income that will provide all users better information for decision making. | | Keywords: Comprehensive, Fair-value, (un)realization, Proprietorship And Entity Theory | References:
1. Allegrini M. (2001), Concetti Di Reddito E Conseguenti Logiche Di Valutazione, Milano, A. Giuffre.
2. Allegrini (2007), L'adozione Degli IAS/IFRS In Italia: Impatti Sostanziali E Formali Sul Bilancio, Torino, Giappichelli.
3. Andrei P. (2006), L'adozione Degli IAS/IFRS In Italia: Impatti Contabili E Profili Gestionali, Torino, Giappichelli.
4. Azzini L. (1957), Investigation Of Production Dynamics In Enterprises, Milano, A. Giuffre.
5. Barker R. (2010), On The Definitions Of Income, Expenses And Profit In IFRS, Accounting In Europe, Vol. 7, N. 2, Pp. 147-158.
6. Barton J., Hansen T. B., Pownall G. (2010), Which Performance Measures Do Investors Around The World Value The Most - And Why? The Accounting Review, Vol. 85, N. 3, Pp. 753-789.
7. Beattie V., McInnes B. (2006), Narrative Reporting In The UK And The US - Which System Works Best?, Institute Of Chartered Accountants In England & Wales.
8. V., McInnes B., Fearnley S. (2004), Through The Eyes Of Management, Narrative Reporting Across Three Sectors, Institute Of Chartered Accountants In England & Wales.
9. Beattie V., Pratt K. (2002), Voluntary Annual Report Disclosures: What Users Want, Research Report, The Institute Of Chartered Accountants Of Scotland, Glasgow.
10. Beretta S., Bozzolan S. (2004), A Framework For The Analysis Of Firm Risk Communication, The International Journal Of Accounting 39, 265-288.
11. Besta F. (1922), La Ragioneria, 3 Vols. Milano, Vallardi.
12. Biddle G., Choi J. (2006), Is Comprehensive Income Useful?, Journal Of Contemporary Accounting And Economics, 2(1), 1-32.
13. Beaver, W. (1981), Financial Reporting: An Accounting Revolution. Englewood Cliffs, NJ: Prentice Hall. Fi
14. Cerboni G. (1902), Saggio Riassuntivo Dei Concetti Filologico-tecnici Formanti Il Sistema Grafico- Razionale Logismografico Per Le Funzioni E Per I Fatti Amministrativi Dell'azienda Economica, Roma, Tipografia Elzeviriana.
15. Cheng, C.S., Cheung J.K. And Gopalakrishnan V. (1993). On The Usefulness Of Operating Income, Net And Comprehensive Income In Explaining Security Returns, Accounting And Business Review, Vol. 23, N. 91, Pp. 195-203.
16. Choi J.H., Zang Y. (2006), Implications Of Comprehensive Income Disclosure For Future Earning And Analysts' Forecasts, Seoul Journal Of Business, Vol. 12, N. 2, Pp. 77-109.
17. Degrange E. (1795), La Tenue Des Livres Rende Faciles. Paris.
18. Dhaliwal D., Subramanyam K.R., Trezevant R. (1999), Is Comprehensive Income Superior To Net Income As A Measure Of Firm Performance?, Journal Of Accounting And Economics, 26, Pp. 43-97.
19. Di Pietra R. (2002), La Cultura Contabile Nello Scenario Internazionale. Istituzioni, Principi Ed Esperienze, Padova, Cedam.
20. Ernstberger J. (2008), The Value Relevance Of Comprehensive Income Under IFRS And US GAAP: Empirical Evidence From Germany, International Journal Of Accounting, Auditing And Performance Evaluation, Vol. 5, N. 1, Pp. 1-29.
21. Gaffikin, M. J. (1987), Methodology For Historical Accounting Research, Abacus 23(1): 17-30.
22. Galassi G. (1987), Concetti Costitutivi E Concetti Operativi Di Reddito, In AA.VV., Saggi Di Ragioneria E Di Economia Aziendale. Scritti In Onore Di Domenico Amodeo, Padova, Cedam.
23. Galassi G. (1980), Capital-Income Relations: A Critical Analysis. In Gino Zappa, Founder Of Concern Economics. Bologna, Accademia Italiana Di Economia Aziendale: Pp. 25-49.
24. Hatfield H. R. (1909), Modern Accounting: It's Principles And Some Its Problems. New York, Appleton. 2
25. Hendrickson E. (1977), Accounting Theory, Illinois Richard D. Irwin
26. Hugli, F. (1923 - 3rd Edition). Bookkeeping Systems And Forms Of Bookkeeping. Berne. (reprint Edition, Osaka: Nihon Shoseki, 1977).
27. Husband, G. (1938), The Corporate Entity Fiction And Accounting Theory, Accounting Review 13(3): 241-253.
28. Hutton A. (2004), Beyond Financial Reporting - An Integrated Approach To Corporate Disclosure, Journal Of Applied Corporate Finance, Vol. 6.
29. Ketz J.E. (1999), Comprehensive Income: What Do The Number Disclosure?, The Journal Of Corporate Accounting And Finance, Summer, Pp. 79-95.
30. Kothari S.P., Leone A.J., Wasley C.E. (2005), Performance Matched Discretionary Accrual Measures, Journal Of Accounting And Economics, Vol. 39, N.1.
31. Knutson, P. H., Napolitano G. N. (1998), Criteria Employed By The AIMR Financial Accounting Policy Committee In Evaluating Financial Accounting Standards. Accounting Horizons, Vol. 12(2), Pp. 170-176. 32. Littleton A. C. (1966, Reprint Of The 1933 Original Edition), Accounting Evolution To 1900, New York, Russell & Russell.
33. Masini C. (1955), La Dinamica Economica Nei Sistemi Dei Valori Dazienda: Valutazioni E Rivalutazioni, Milano, A. Giuffre.
34. Newberry S. (2003), Reporting Performance: Comprehensive Income And Its Components, Abacus, Vol. 39, N. 3, Pp. 325-339.
35. Nissan D, Penman, S. Principles For The Application Of Fair Value Accounting, Center For Accounting And Securities Research, Columbia University, Working Paper Number 2
36. Paton W. A. (1920), Accounting Theory. New York: Ronald Press
37. Nissley W. (1940), Charges Against Surplus, American Institute Of Accountants YearBook, Pp. 39-42.
38. Paton W. A., Littleton A. C. (1940), An Introduction To Corporate Accounting Standards, American Accounting Association.
39. Previts G.J. (1980), A Critical Evaluation Of Comparative Financial Accounting Thought In America 1900 To 1920, New York, Arno.
40. Previts G.J., Merino B.D. (1998), A History Of Accountancy In The United States: The Cultural Significance Of Accounting. Columbus, Ohio State University Press.
41. Rossi G. (1884), Studi E Ricerche Di Logismografia Generale, La Nuova Ragioneria Italiana, 2, Pp. 164-247.
42. Sprague C. E. (1880), The Algebra Of Accounts, The Book-Keeper, July 20, Pp. 2-4.
43. Sprague C. E. (1908), The Philosophy Of Accounts, New York.
44. Schar J. F. (1890), Attempt Of A Scientific Treatment Of Bookkeeping, Basel, Verband Schweizerischer Konsumvereine.
45. Schar J. F. (1911), General Commercial Economics, Part 1. Leipzig, G. A. Gloeckner.
46. Schar J. F. (1914), Bookkeeping And Balance Sheet. Berlin, Springer Verlag (later By J. F. Schar And Willy Prion. Berlin, Julius Springer, 1932).
47. Schmalenbach E. (1921), Monetary Adjustment In The Balance-based Income Calculation, Zeitschrift Fur Handelswissenschaftliche Forschung. In O. F. Graves, G. E. Dean And F. L Clarke, Eds. Schmalenbach's Dynamic Accounting And Price-level Adjustments. New York, Garland Publishing, Pp. 3-20.
48. Schmalenbach E. (1925), The Effect Of Monetary Value Fluctuations On The Income Calculation. Leipzig: A. Gloeckner. In O. F. Graves, G. E. Dean And F. L Clarke, Eds. Schmalenbach's Dynamic Accounting And Price-level Adjustments. New York, Garland Publishing, Pp. 83-166.
49. Schmalenbach E. (1959), Dynamic Accounting (English Translation, By G. W. Murphy And Kenneth S. Most Of The 3rd Edition Of The Dynamische Bilanz. Cologne, Westdeutscher Verlag, 1925). London, UK: Gee And Co.
50. Quagli A. (2006), L'adozione Degli IAS/IFRS In Italia: I Piani Di Remunerazione A Base Azionaria, Torino, Giappichelli.
51. Sorter, G. (1969), An Events Approach To Basic Accounting Theory, Accounting Review (January), 12-19.
52. Staubus G. J. (1959), The Residual Equity Point Of View In Accounting, Accounting Review 34(1): 3-13.
53. Sterling R. (1967), Reviewer's Corner: A Statement Of Basic Accounting Theory, Journal Of Accounting Research, Pp. 95-112.
54. Teodori C. (2006), L'adozione Degli IAS/IFRS In Italia: Le Attivita Immateriali E L'impairment Test, Torino, Giappichelli.
55. Zambon S. (2002), Informazione Societaria E Nuovi Processi Di Armonizzazione Internazionale. Alle Soglie Del Cambiamento, Bologna, Il Mulino.
56. Zappa G. (1950, First Edition, 1937, Preliminary Edition 1920-1929), The Business Income - Double Entries, Accounts And Financial Statements Of Commercial Enterprises, Milano, A. Giuffre.
57. Zappa G. (1957), Production Activities In The Economy Of Entities, Milano, A. Giuffre.
58. Zeff S. A. (1978), A Critical Examination Of The Orientation Postulate In Accounting With Particular Attention To Its Historical Development, New York: Arno Press |
| | Back to journal ... |
|
|
| |
|
|
|
