Research On Disclosure Of Other Comprehensive Income In China

With the economic environment changing, the decision-usefulness view replaced the concept of fiduciary duty as the accounting goal. In order to provide the users of financial reports with information assisting in decision-making process, the accounting standard makers from different countries pay their close attention to the improvement in the income reporting. The Financial Accounting Standard Board (FASB) and International Accounting Standard Board (IASB) had adopted measures to improve traditional income reporting and required companies to report comprehensive income (CI) and other comprehensive income (OCI) since the FASB formally put forward the concept of comprehensive income in1980. To ensure the Chinese Accounting Standard and International Financial Reporting Standards convergence and promote the economic development in China, the Ministry of Finance of the People’s Republic of China issued<No.3Interpretation of Enterprise Accounting Standard> and <The notice about annual reports in2009based on accounting standard by listed companies and non-listed companies> and formally introduced the CI and other OCI in2009. Based upon the official documents above, companies have been obliged to present the information of other comprehensive income in adjusted income statement and statement of change in equity, and disclose the components of OCI in notes to financial statements since2009. In recent years, more and more specialists and scholars began to study the problem of disclosure of other comprehensive income and have made considerable achievements. However, researches about the current situation of disclosure of other comprehensive information by using the data and information from annual reports in our country are relatively rare. Therefore, this paper will mainly focus on the current situation and problem of disclosure of other comprehensive income in our country with sample data from Shanghai A-share listed companies’annual reports from2009to2012, and especially use the case study method to analyze the existing problems related to disclosure of OCI. This paper is divided into six parts:The first chapter is an introduction to the background, purpose, significance of this paper, with research thought, structure and method included in this part as well.The second chapter is a review on related literature. In this part, the dissertation will have a complete understanding of both foreign and domestic studies on problem of disclosure of OCI. From the part, we know that provision and development process of reporting comprehensive income and OCI are different between at home and abroad, so there exist differences between domestic studies and board studies.The third chapter is the over vies of the theory. The relevant theories mainly include the concept of OCI, the identification of standard of OCI and the components of OCI, etc.The forth chapter focuses on the current situation of disclosure of OCI from the quantitative point. This part mainly analyzes the disclosure situation of OCI, with sample data from Shanghai A-share listed companies’ annual reports from2009to2012. From this part, we will get a perspective of the disclosed sums of OCI, the number of the enterprise which discloses OCI and their industrial distribution.The fifth Chapter focuses on the problem of disclosure of OCI from the qualitative point. In this part, different types of problems of disclosure of OCI will be summarized, and then the specific cases will be analyzed, and the application of OCI is further explored.Finally, the sixth chapter is to draw conclusions and elaborate on policy recommendations, research limitations and prospects.The contribution of this paper lies in analyzing and summarizing the current situation of disclosure of OCI from2009to2012by collecting and sorting the data and relevant information from Shanghai A-share listed companies’ annual reports completely, and selecting typical cases to analyze the existing problems on the basis of summarizing the problems of disclosure of OCI. Apart from that, this paper also attempts to explore the reasons for relevant problems and puts forward policy recommendations.The limitations of this paper are listed following:firstly, the study sample of this paper only contains Shanghai A-share listed companies’ annual reports, so the conclusion of this paper is restricted to this research scope; secondly, the reliability of OCI in financial report depends on its proper recognition and computation, but there inevitably exist problems in the process of recognizing and commutating OCI, and this will affect the OCI in financial report, so the conclusion of this paper may only reflect the objective but not real situation in our country; thirdly, the problems of disclosure of OCI listed in this paper are only restricted to the research sample of this paper, and there may exist omissions limited by my limited knowledge and competence. Besides, the identification of some problems maybe affected by subjective factors, so there may exist drawbacks in the research.