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The Value Relevance of Components of Other Comprehensive Income When Net Income Is Disaggregated

Author

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  • Taisier A. Zoubi

    (Department of Accounting, School of Business Administration, American University of Sharjah, Sharjah, UAE)

  • Feras Salama

    (Department of Accounting, School of Business Administration, American University of Sharjah, Sharjah, UAE)

  • Mahmud Hossain

    (Department of Accounting, School of Business Administration, American University of Sharjah, Sharjah, UAE)

  • Yass A. Alkafaji

    (Department of Accounting, School of Business Administration, American University of Sharjah, Sharjah, UAE)

Abstract

The purpose of this study is to examine the equity pricing of other comprehensive income when earnings are disaggregated into several components. Our findings indicate that other comprehensive income can better explain variation in stock returns when net income is reported in a disaggregated form. Additionally, we find that disaggregating both net income and other comprehensive income can explain more of the variation in the stock returns than the two summary components of comprehensive income. Our results survive a series of robustness checks.

Suggested Citation

  • 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.
    • Handle: RePEc:wsi:rpbfmp:v:19:y:2016:i:04:n:s0219091516500272
    DOI: 10.1142/S0219091516500272
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