IDEAS home Printed from https://ideas.repec.org/a/kap/rqfnac/v18y2002i4p405-21.html
   My bibliography  Save this article

Information Content of Earnings and Earnings Components of Commercial Banks: Impact of SFAS No. 115

Author

Listed:
  • Jaggi, Bikki
  • Zhao, Ronald

Abstract

SFAS No. 115 modified classification of debt and equity securities held by firms and also modified the reporting format for unrealised gains/losses on security transactions (URGL). This study investigates whether implementation of SFAS No. 115 improved information content of earnings and earnings components of commercial banks. Improvement in the information content is measured by comparing the association between equity returns and earnings and earnings components of the post-adoption period of SFAS No. 115 with the pre-adoption period. The test results indicate that the association of equity returns with earnings components and aggregate earnings is significantly stronger in the post-adoption period compared to the pre-adoption period. The improvement is especially evident for the components of URGL and non-interest revenues. These results suggest that information provided by earnings components is considered more value relevant for investment decision after implementation of SFAS No. 115. Findings on non-interest revenues indicate that revenues from banking activities other than lending also play an important role in the commercial banks' profitability. Copyright 2002 by Kluwer Academic Publishers

Suggested Citation

  • Jaggi, Bikki & Zhao, Ronald, 2002. "Information Content of Earnings and Earnings Components of Commercial Banks: Impact of SFAS No. 115," Review of Quantitative Finance and Accounting, Springer, vol. 18(4), pages 405-421, June.
    • Handle: RePEc:kap:rqfnac:v:18:y:2002:i:4:p:405-21
    as

    Download full text from publisher

    File URL: http://journals.kluweronline.com/issn/0924-865X/contents
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Takashi Obinata, 2002. "Concept and Relevance of Income," CIRJE F-Series CIRJE-F-171, CIRJE, Faculty of Economics, University of Tokyo.
    2. Mahmud Hossain, 2008. "Change in value relevance of quarterly foreign sales data of U.S. multinational corporations after adopting SFAS 131," Review of Quantitative Finance and Accounting, Springer, vol. 30(1), pages 1-23, January.
    3. Ronald Zhao & Yihong He, 2014. "The accounting implication of banking deregulation: an event study of Gramm-Leach-Bliley Act (1999)," Review of Quantitative Finance and Accounting, Springer, vol. 42(3), pages 449-468, April.
    4. Shan, Yuan George, 2015. "Value relevance, earnings management and corporate governance in China," Emerging Markets Review, Elsevier, vol. 23(C), pages 186-207.
    5. Taisier A. Zoubi & Feras Salama & Mahmud Hossain & Yass A. Alkafaji, 2016. "The Value Relevance of Components of Other Comprehensive Income When Net Income Is Disaggregated," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 19(04), pages 1-36, December.
    6. Fatima Alali & Bikki Jaggi, 2011. "Earnings versus capital ratios management: role of bank types and SFAS 114," Review of Quantitative Finance and Accounting, Springer, vol. 36(1), pages 105-132, January.
    7. James Cataldo, 2015. "A framework for assessing comprehensive income risk exposure over varying time horizons," Review of Quantitative Finance and Accounting, Springer, vol. 45(4), pages 819-844, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:rqfnac:v:18:y:2002:i:4:p:405-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.