Does recycling contribute to accounting quality?
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CitationErtuǧrul, M., & Coşkun, A. (2019). Does recycling contribute to accounting quality? [Yeniden siniflandirma muhasebe kalitesine katki sunuyor mu?] Bogazici Journal, 33(2) doi:10.21773/boun.33.2.5
As a result of amendments in existing financial reporting standards, certain items have been transferred (or recycled) from other comprehensive income to income statement since 2013. Based on a sample of Turkish listed firms over 2013-2018, we document the following outcomes for accounting quality, measured by value relevance and predictive power, of recycling. First, recycling is not value relevant, and net income with recycling and net income are equally value relevant. In other words, recycling does not provide useful information for valuation purposes. Second, net income with recycling and net income have statistically indifferent predictive powers