How Do Malaysian ACE Market Companies Report Comprehensive Income?

Azhar Abdul Rahman^1, and Mohd Diah Hj Hamdan¹

¹School of Accountancy, College of Business, Accounting Building, Universiti Utara Malaysia, Malaysia

Cite this paper:
Azhar Abdul Rahman and Mohd Diah Hj Hamdan. How Do Malaysian ACE Market Companies Report Comprehensive Income?. Journal of Business and Management Sciences. 2013; 1(2):23-31. doi: 10.12691/jbms-1-2-3

Abstract

In Nov 2009, the Malaysian Accounting Standards Board (MASB) released FRS 101, Presentation of Financial Statements, effective for fiscal years beginning on or after 1 January, 2010. This statement established certain standards for reporting and presenting comprehensive income in the general-purpose financial statements. In accordance with the definition provided by FRS 101, total comprehensive income is the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners. Data were collected from 84 non-financial companies of the ACE market listed on the Bursa Malaysia (Malaysian Stock Exchange). The study showed that 82 companies used a first format which combined the statement of net income and comprehensive income (using a single statement of comprehensive income), while only 2 companies used the second format which separated the income statement from the statement of comprehensive income. Only 51 companies reported items that fall under the Other Comprehensive Income (OCI) category. Foreign currency translation adjustment was the most prominent item in the OCI, followed by gains and losses on re-measuring available-for-sale financial assets. Almost half of the companies that reported OCI were negatively affected by the foreign currency translation adjustment. Further, the paper also discusses some ancillary findings pertaining to the presentation of the details of comprehensive income.

Keywords:
ACE market comprehensive income FRS 101 Malaysia malaysian accounting standards board

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