IDEAS home Printed from https://ideas.repec.org/a/taf/raaexx/v18y2011i2p145-168.html
   My bibliography  Save this article

Information Content of Other Comprehensive Income and Net Income: Evidence for Japanese Firms

Author

Listed:
  • Keiichi Kubota
  • Kazuyuki Suda
  • Hitoshi Takehara

Abstract

This paper investigates information content of net income, other comprehensive income items, and “pseudo” comprehensive income for Japanese firms. The relative information content test demonstrates we cannot distinguish between net income and other alternative comprehensive income numbers. The incremental information content test shows other comprehensive income items have significant information content. The signs are counterintuitive, but we find the stock market reactions to other comprehensive income items are related to the degree of firms' foreign dependency and on the magnitude of the ratio of available-for-sale securities to equities in a meaningful way. We conclude that comprehensive income and other comprehensive income are useful to disclose.

Suggested Citation

  • Keiichi Kubota & Kazuyuki Suda & Hitoshi Takehara, 2011. "Information Content of Other Comprehensive Income and Net Income: Evidence for Japanese Firms," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 18(2), pages 145-168.
    • Handle: RePEc:taf:raaexx:v:18:y:2011:i:2:p:145-168
    DOI: 10.1080/16081625.2011.9720879
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/16081625.2011.9720879
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/16081625.2011.9720879?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. Olivier J. Ramond & Jean-François Casta & Stephen W.J. Lin, 2007. "Value-relevance of reporting comprehensive income under international GAAPs: Insights from major European financial markets," Post-Print halshs-00163185, HAL.
    2. repec:dau:papers:123456789/2814 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Zhang, Ailian & Wang, Shuyao & Liu, Bai & Fu, Jingyuan, 2020. "The double-edged sword effect of diversified operation on pre- and post-loan risk in the government-led Chinese commercial banks," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    2. Eberhartinger, Eva & Genest, Nadia & Lee, Soojin, 2020. "Financial statement users’ judgment and disaggregated tax disclosure," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 41(C).
    3. Abderrahmane Djaballah & Anne Fortin, 2021. "Value Relevance of Comprehensive Income for the Canadian Market," Accounting Perspectives, John Wiley & Sons, vol. 20(1), pages 49-77, March.
    4. Aliyu Baba Usman & Aliyu Baba Usman & Noor Afza Binti Amran & Hasnah Binti Shaari, 2016. "The Value Relevance of Comprehensive Income in Nigerian: A Pilot Test," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 793-797.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohammad Ali Al Hayek & Abdel-Rahman kh. El-Dalabeeh *, 2019. "The Impact of Comprehensive Income on Owners Equity at the Jordanian Commercial Banks, Analytical Study," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(9), pages 1312-1320, 09-2019.
    2. John M. Barrios & Marco Fasan & Daniele Macciocchi, 2013. "CEO turnover, earnings management and value relevance. A theoretical analysis on the Italian context," Working Papers 11, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    3. Veltri, Stefania & Ferraro, Olga, 2018. "Does other comprehensive income matter in credit-oriented systems? Analyzing the Italian context," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 30(C), pages 18-31.
    4. Schaberl, Philipp D. & Victoravich, Lisa M., 2015. "Reporting location and the value relevance of accounting information: The case of other comprehensive income," Advances in accounting, Elsevier, vol. 31(2), pages 239-246.
    5. Takashi Obinata, 2008. "Net Income vs. Comprehensive Income -A Reexamination of Attributes, Relevance, and Price Informativeness-," CARF J-Series CARF-J-053, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

    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:taf:raaexx:v:18:y:2011:i:2:p:145-168. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/raae20 .

    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.