Research On The Decision Usefulness Of Comprehensive Income Information

With the disclosure of comprehensive income information,attention to the information of comprehensive income is increasing,more and more research on the value relevance of comprehensive income and its presentation.From the point of view of accounting standards of comprehensive income information disclosure goal is to increase investor's decision-making useful information,enhance the transparency of accounting information,so in theory for this part has confirmed unrealized accounting information included in other comprehensive income and disclosed,in order to improve the decision usefulness of accounting information.However,there are some opponents argue that other comprehensive income fluctuation,which will be part of the company is difficult to control the unrealized gains and losses in the report especially in the profit statement shown is not conducive to enterprise future transfer actual cash flow and profitability of the ability to obtain information,leading investors of the enterprise make any mistake and this also constitutes a contradiction between the current international accounting standards and disclosure of accounting information disclosure of comprehensive income information,namely the standard setters expected in the profit statement of comprehensive income disclosure of specific information to improve the accounting information transparency,according to Bamber(2010)found that more than 80% of Sample Firms,considering the influence of comprehensive income the volatility of the choice of information disclosure in the statement of changes in owners' equity.Our country in comprehensive income information disclosure using uniform exposure method,2014,the Ministry of finance of the Accounting Standards for Enterprises No.30 —Presentation of financial statements(hereinafter referred to as CAS 30)was revised and demanding in the profit table columns show the specific information of comprehensive income information.At the same time,in the statement of assets and liabilities increase shown in other comprehensive income accumulated balance.From the theory of comprehensive income covers current recognised gains and losses have achieved and confirmed unrealized gains and losses,improve the transparency of accounting information,enhances the relevance of accounting information,but applying for comprehensive income information disclosure but not with the current match,whether inbusiness decision-making,risk control and performance evaluation of the use of the degree is not high,the author thinks that the main reasons: one is based on the comprehensive income,net profit and other comprehensive income for the lack of reliable definition,cause the accounting information providers and users in the use of the information there is misunderstanding;two is due to the quality of accounting information for comprehensive income and its components of uncertainty theory most of the practice and think that only the net profit index has value relevance,and other comprehensive income is the lack of predictive ability And sustainability,resulting in an important index of comprehensive income in other comprehensive income was excluded from the important link in the value estimation;the third is the lack of reliable source in market value changes caused by the comprehensive income and other comprehensive income volatility,making comprehensive income related data.However,from another point of view this volatility may improve the relevance of accounting information,help users of accounting information in a timely and effective identification of enterprise may face various risks,especially the risks associated with the market.So aiming at the problem of comprehensive income and its components system research,through theoretical analysis of comprehensive income and its components to asset liability view as the foundation,based on the market value to provide useful information for decision making characteristics.Based on the statistical description analysis,correlation analysis and multivariate analysis of comprehensive income and its components,the prediction ability,value relevance,and the risks associated carried out empirical research.From the point of view of the capital market,including securities analyst with the professional and non professional investors,before the research on comprehensive income information decision usefulness more is based on the perspective of capital market,and at least two distinguished research,this paper will further from the securities analyst prediction error of testing the perspective of comprehensive income information disclosure,inspection comprehensive income for the analysts forecast provide incremental information to improve the accuracy of analyst forecasts.From the structure of this thesis includes the following four parts:The first part raises the question.The first chapter includes.In the introduction,mainly introduces the research background,research significance,research motivation of this dissertation,the definition and analysis of the key concepts in this article.This paper briefly introduces the research methods adopted,put forward the problems that need further study,and expounds the objectives and significance of this study,clear the research ideas and content.The second part is the theoretical analysis.Include: the second chapter and the third chapter,the second chapter is the literature review,respectively from the comprehensive income prediction ability and persistent,value relevance,risk correlation and comprehensive income and securities analysts forecast point of view of literature review;in the third chapter,as the theoretical basis,the comprehensive income,comprehensive income volatility and the correlation risk connotation to be defined and clear,from the view of decision usefulness of information and measurement of two aspects to elaborate the comprehensive income from the theoretical basis of the concept of,and briefly listed and the theory of asymmetric information and assets and liabilities theory,the comprehensive income information decision usefulness empirical research make theoretical groundwork.The third part is empirical research,including the fourth chapter and the fifth chapter,the sixth chapter and the seventh chapter.First of all,this article from the comprehensive income earnings quality of focuses on the study of comprehensive income to the expected net profit,operating activities cash flow,comprehensive income and other comprehensive income prediction ability,inspection of comprehensive income and its components,the predictive ability and continuing information.Secondly,this paper based on the value relevance of time effect of comprehensive income and its components,in testing the value relevance of this paper not only test the comprehensive income comprehensive value relevance,will comprehensive income layers of decomposition to details of the subjects,the analysis of the value relevance of specific accounting subjects.In this chapter the sample interval for the2009-2014 year,the specific information on the 2009-2013 annual comprehensive income and other comprehensive income in the statement of changes in equity listed in 2014,began to adjust to the face of the income statement and the balance sheet in the amount of increase inthe comprehensive benefits of the project to he listed the cumulative balance.Through the inspection can be further confirmed and reported in different positions have an impact on the comprehensive income and other comprehensive income value relevance;thirdly,the relevance of accounting risk characteristics of comprehensive income volatility of comprehensive income based on the descriptive statistical analysis on the volatility of comprehensive income,from the three dimensions of the full sample,financial industry and non financial sector risk inspection information content of comprehensive income volatility,again on the basis of comprehensive income volatility into Test of effect of comprehensive income volatility of market pricing and comprehensive income volatility of comprehensive income value relevance degree influence the price of the model;finally,the information demand of the main focused on professional securities analysts,of comprehensive income information disclosure of securities analysis division profit forecast the impact of empirical research.The fourth part is the summary and inspection countermeasures and future research,including the eighth chapter.On the above theoretical analysis and empirical research of gold systematically summarized,and put forward some policy suggestions.Finally,in view of the limitations of this study put forward the direction of further research is needed in the future.The following conclusions are obtained through theoretical analysis and empirical research:First,the comprehensive income and its components has the ability to predict and other comprehensive income in the predictor that has negative to the persistent,indicating that the accounting information in our country of other comprehensive income for non temporary accounting information.In the subsequent accounting treatment of other comprehensive income information occurred forward,but the negative to the predictive ability of is easy to be ignored by the users of accounting information.Second,empirical research found that comprehensive income and net profit have value relevance,and other comprehensive income and its components by price model and return model to get the value relevance of did not come to the same conclusion can be seen the valuerelevance of other comprehensive income and its components is not stable.Taking into account the accounting standards in the implementation process in the presence of time effect.Therefore,this paper further divided into annual test the value relevance of other comprehensive income,found 2014 other comprehensive income significant value relevance,the conclusion respectively through the pricing model and revenue model is verified,that cas30 Accounting Standards No.revision improves the accounting information user emphasis on comprehensive income information,increase the information content of accounting.Third,from the perspective of risk information content see per share of other comprehensive income volatility and stock return volatility has a significant positive correlation,the conclusion only for to the non-financial sector,and fluctuations in the financial sector earnings does not have correlation risk;from the value of earnings volatility of point of view,the net profit per share volatility has significant value relevance,and fluctuations in the share of other comprehensive income does not have value relevance;however earnings volatility,especially fluctuations in different directions are the value relevance of earnings have significant impact.Fourth,starting from the securities analyst perspective,the study on the influence of earnings of other comprehensive income,and empirical test.The results showed that after the mandatory disclosure of other comprehensive income analyst earnings forecast accuracy improved.Conclusion support at this stage of other comprehensive income information in analyst forecast effect and indirect evidence of the value relevance of other comprehensive income.General respectively in this paper from the view of accounting information users and earnings quality,value relevance,in relation to the risk of different information decision usefulness of comprehensive income and its components were analyzed.It studies and confirms the comprehensive income is useful for decision-making,mechanism,users of accounting information of listed companies and put forward policy suggestions on the formulation of the relevant accounting standards.For accounting standard setters have the following policy recommendations: first of all,for accounting standards setting need to strengthen the comprehensive income information disclosure requirements and accounting standards formulated departments should further clarify the other comprehensive income items and contents.On the one hand,to clear differences and other comprehensive income equity transactions,especially to define more specific to the equity transaction.On the other hand to confirm the specific items of other comprehensive income to make it clear.In addition the FASB to enterprise more effective record and the disclosure of accounting information of comprehensive income,issued a special sfas130 comprehensive income reporting,and comprehensive income accounting information of our country are scattered in various sections of the specific standards,lack of a unified comprehensive income and normative discourse and requirements.Therefore,it is necessary to establish a set of normative standards of comprehensive income.Secondly,establish the comprehensive income concept frame,due to the lack of comprehensive income concept of the perfect framework,resulting in comprehensive income and other comprehensive income concept is not clear,the lack of other comprehensive income and net profit division standard,different criteria classification adjustment standard and information disclosure requirements appear inconsistent questions,makes comprehensive return there are significant differences in the application process,reduces the information quality of comprehensive income,so the standards should be objective,comprehensive income reporting comprehensive income information quality characteristics,the comprehensive income statement of accounting elements and the recognition,measurement and report to construct the comprehensive income concept framework,so as to formulate and implement basic guiding principles oriented accounting standards.Finally,strengthen the supervision to strengthen the supervision of the accounting information disclosure and improve the quality of accounting information of comprehensive income,this paper argues that in the implementation of comprehensive income information disclosure at the same time,we should strengthen the strict supervision system,the accounting information of comprehensive income as the focus of regulation of the accounting subjects,avoid non listed companies will be comprehensive income accounting as a reservoir of earnings management.Policy recommendations for listed companies are as follows: first of all,to improve the enterprise accounting information disclosure transparency involves to the market valuation comprehensive income accounting information based on the design of accounting processing method and program are complex and in charge of strong,in order to reduce the accounting information to make use of this part of the accounting information to analyze and judge the deviation,listed companies need to improve the transparency of accounting information.From the point of view of accounting personnel improve accounting professional level,to realize the importance of comprehensive income information,improve the level and ability of enterprise to report comprehensive income,especially in more complex financial instruments trading business accounting treatment and more subjective judgment and analysis,management and accounting personnel professional quality and professional judgment ability have higher requirements.Secondly,the comprehensive income fluctuation information to improve the enterprise's ability to cope with risk through the test of comprehensive income risk correlation can be seen comprehensive income volatility has significant risk information content,enterprises should establish and comprehensive income volatility as an important risk identification index,establish risk management oriented wind control system,distinguishing between the comprehensive income sources of variation of the systematic risk and non systematic risk,engaged in before the guard,the real-time risk monitoring and ex post risk supervision and inspection of the three aspects of enterprise risk control.Finally,the performance evaluation on considering the comprehensive income index of comprehensive income information includes all the information of changes in equity of main business and non main business caused by the risk,has relevance and value relevance,as a comprehensive accounting index,enterprise can be the index for performance evaluation of management consider,especially in other comprehensive income in the proportion of accounting earnings increasing,the risks and benefits of its existence should not be ignored by enterprises especially the management,but if not other comprehensive income indicators into performance evaluation,management is still by traditional main business as the main mission that will lead to the management to ignore the risk may exist,and once the risk as a result of other comprehensive income items,management will To not within the scope of their control and avoid the risk actually in net profit based performance evaluation system are not within the scope of their control of risk factors,so to control whether or not a performance evaluationindex is not established.On the contrary,if the performance evaluation with comprehensive income indicators,can strengthen the management to focus on this part has confirmed unrealized gains and losses and risks.Policy recommendations for the users of accounting information are as follows: first,a correct understanding of the predictive ability of comprehensive income and persistent,from the view of the research conclusion comprehensive income and its specific components of the future of net profit and operating cash flow have significant correlation,the other comprehensive income is negative to the ability of sustained,so as the accounting information users should make full use of the characteristics of information quality of comprehensive income,by corporate disclosure of consolidated income accounting information,to improve the enterprise expected revenue forecast ability.Secondly,a correct understanding of the comprehensive income information content of the different components,the report of comprehensive income is complement,not replace,net profit,different income measurement should be showing a different decision usefulness in different applications.In this paper,in the course of the study found that increased the value relevance of accounting information disclosure of other comprehensive income static classification and dynamic classification of information,and different projects,the degree of correlation also exist great difference.Therefore,it is necessary to fully understand the information content of the comprehensive benefits of different projects,capture and access and the market value of the comprehensive information.Finally,a correct understanding of the comprehensive income volatility as the introduction of fair value measurement of comprehensive income is concerned,the accounting information users should fully understand the comprehensive income fluctuations of accounting information,enterprises may face the risk of information obtained by different income fluctuations in the direction.The main innovations of this paper include the following four aspects:1.In this paper,on the decision usefulness of comprehensive income and its components were system research,embodied in the two aspects of content and perspective: first is the content do informative and comprehensive.Starting from the characteristics of information quality,the predictive ability of the study of comprehensive income and its components,andof the comprehensive income value relevance and risk correlation research;the second is do perfect perspective,taking into account both the effects of comprehensive income and its components on the capital market,and individually for professional securities research analyst analyst earnings forecast and comprehensive income information disclosure between the relationship.2.Enrich the research sample of comprehensive income.On the one hand,the incremental information content of comprehensive income is mainly reflected in the other comprehensive income information disclosure,so the focus of this paper is the study of the other comprehensive income,previous studies have focused on the total of other comprehensive income,this paper manually collected other comprehensive income of each part of the accounting information,and to segment,from static classification(including the change in fair value of financial assets,profit and loss balance,the translation of foreign currency statements of cash flow hedging tools to generate profits or losses and share according to the equity method of accounting units being invested in other comprehensive income share)and dynamic classification(including the current recognized unrealized other comprehensive income and current weight the classification of other comprehensive income in the profit and loss)tests the value relevance of other comprehensive income in two parts;on the other hand,there have been many researches Choice of financial sector.However,because of the different information characteristics of non financial industry and with the use of other comprehensive income to expand continuously,the influence of various industries gradually increases,this paper respectively to the financial and non-financial sectors listed companies were test model.3.Implementation of the innovation model and ideas.Previous research is the comprehensive income and the value relevance of correlation risk as independent individuals are studied separately,however risk relevance and value of the correlation is not isolated no association,so the comprehensive income risk correlation and value relevance to combine research,after the test of comprehensive income volatility risk information content on the price model based increased volatility of earnings and earnings volatility and current earningsby.The results show that increased earnings volatility information variable price model's goodness of fit is more high,the stock price has more explanatory power.4.The research methods of innovation,in the research of value relevance of considering delay accounting standards may exist in the process of implementation and application,considering the time effect of annual inspection of comprehensive income disclosure effect.