PREDICTIVE VALUE OF OTHER COMPREHENSIVE INCOME: EVIDENCE FROM ASEAN

Puji Rahayu, Indra Wijaya Kusuma

Abstract


Abstract

This paper examines the predictive value of other comprehensive income and its disclosure in ASEAN. Unlike value relevance, the predictive value of other comprehensive income has not been extensively addressed in the literature. We conduct the first study examining the predictive value of other comprehensive income and its disclosure to prove that not only fair value as relevant information, but also other comprehensive income reflecting the changes of fair value. We use hand-collected data taken from the financial reports. This study employs a panel regression model to test the ability of other comprehensive income and its disclosure to predict firms’ future performance. The results confirm that as relevant information, other comprehensive income and its disclosure have predictive value. In addition, other comprehensive income which interacted with disclosure of other comprehensive income resulted predictive value only for one year ahead. Furthermore, other comprehensive income components which belongs to fair value level 1 and 2 have predictive value because it uses market-based input. Meanwhile, other comprehensive components which belong to fair value level 3 only have predictive value for one year ahead because it uses unobservable input that can ­­lead to higher subjectivity.

Abstrak 

Penelitian ini bertujuan untuk menguji nilai prediktif laba komprehensif lain dan pengungkapan laba komprehensif lain di ASEAN. Tidak seperti relevansi nilai, nilai prediktif laba komprehensif lain tidak banyak dibahas di dalam literatur. Kami melakukan penelitian pertama untuk menguji nilai prediktif laba komprehensif lain dan pengungkapan laba komprehensif lain untuk membuktikan bahwa tidak hanya nilai wajar yang menjadi informasi relevan, tetapi juga laba komprehensif lain yang menggambarkan perubahan nilai wajar. Kami menggunakan data hand-collected yang diambil dari laporan keuangan. Penelitian ini menggunakan model regresi data panel untuk menguji kemampuan laba komprehensif lain dan pengungkapan laba komprehensif lain untuk memprediksi kinerja perusahaan di masa depan. Hasil penelitian menegaskan bahwa sebagai informasi yang relevan, laba komprehensif lain dan pengungkapan laba komprehensif lain memiliki nilai prediktif. Kemudian, laba komprehensif lain yang diinteraksikan dengan pengungkapan laba komprehensif lain menghasilkan nilai prediktif hanya untuk satu tahun mendatang. Selanjutnya, komponen laba komprehensif lain yang masuk nilai wajar tingkat 1 dan 2 memiliki nilai prediktif karena menggunakan input berbasis pasar. Sementara itu, komponen laba komprehensif lain yang masuk nilai wajar tingkat 3 hanya memiliki nilai prediktif untuk satu tahun ke depan karena menggunakan unobservable input yang menyebabkan subjektivitas yang lebih tinggi.


Keywords


disclosure; fair value; other comprehensive income; predictive value; laba komprehensif lain; nilai prediktif; nilai wajar; pengungkapan

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DOI: http://dx.doi.org/10.21002/jaki.2020.09



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