Value Relevance of Consolidated Income information based on the Presentation Format under the K-IFRS

Purpose - The purpose of this paper is to examine whether the presentation format affects the value relevance of consolidated comprehensive income, consolidated net income, and consolidated other comprehensive income after the adoption of the Korean International Financial Reporting Standard (K-IFRS) in 2011. Design/Methodology - To test the value relevance of consolidated comprehensive income, consolidated net income, and consolidated other comprehensive income based on two presentation formats, we use the Ohlson(1995)’s model over the full sample of all listed firms during 3 years after the adoption of the K-IFRS (2011 - 2013). Findings - We find that the value relevance of consolidated comprehensive income and that of consolidated net income are higher when they are reported in separate statements compared to when they are reported in a single statement. However, we cannot observe significant differences in the value relevance of consolidated other comprehensive income between the two presentation formats. Implications - The results of this study imply that reporting the consolidated comprehensive income and the consolidated net income in separate statements can provide more useful information compared to reporting in a single statement, while presentation format does not seem to affect the information usefulness of the consolidated other comprehensive income.