Experimental Study For The Impact Of Comprehensive Income Disclosure’s Forms On Valuation Judgments

Valuers’ valuation judgments will be affected by the clarity and transparency of thedisclosure of value relevant information. As an indicator, which comprehensively reflectthe financial performance of corporate, comprehensive income is becoming an importantfactor that must be considered in the valuation judgment. Therefore, it is necessary toidentify the effect which played by the disclosure form of comprehensive income on thevaluation judgment.Firstly, the concept of valuation judgment is defined and the relationship betweenvaluation judgment and accounting judgment, auditing judgment is clarified. The impact ofdifferent comprehensive income disclosure form on valuation judgment is pointed out. Andthen through the form of a questionnaire issued in the country, a survey of Chineseappraisers’basic understanding of comprehensive income and valuation judgment isanalyzed. Then, a3×2(comprehensive disclosure form×the level of earningsmanagement))forms of experiment are designed, a sample with four consecutivestatements is selected, comprehensive income is disclosed in notes, income statement,Statement of stockholders’equity and a level of earnings management is designed.According to the six share prices which valuers estimate in different conditions, fourproposed hypotheses are testified by using variance test. Then evaluation of the statement’squality and the results of company’s annual net income growth rate estimated by valuersare analyzed, evaluation of the statement’s quality includes clarity, reliability, theauthenticity of information that reflect the performance, the ability to grow in the future aswell as the quality of net income.The experimental results show that in China the impact of different comprehensiveincome disclosure forms on valuation judgment is not significant different, the result isdifferent from the United States and other countries. From the qualitative survey results,the time of China’s implementation of comprehensive income disclosure is too short,appraisers are not familiar with comprehensive income disclosure and the level ofinterpreting the related issues is low, so many appraisers can not complete the survey tasks. Therefore, the experimental results are consistent with the investigation and analysis. Fromthe Anglo-American perspective, the comprehensive income disclosure is becoming areasonable tendency. China should strengthen the specification of comprehensive incomedisclosure and take effective means to enhance the understanding of the related persons onthe comprehensive income so as to enhance its professional practices.