The Research On The Value Relevance Of Listed Companies’Comprehensive Income

ABSTRACT:With the rapid development of economy of our country in recent years, the capital market is increasingly perfect. As the capital market develops rapidly, the requirements for information of investors is increasing day by day. The integration of the global economy makes the traditional net income index shows some defects, so the traditional profit index can’t meet the demand of decision makers. Many countries including our country began to innovation, in order to adapt to international convergence, in2009, In2009, the concepts of comprehensive income and other comprehensive income were defined, With the implementation of the policy, the attention of the information users, we have to make further inspections to make sure whether the comprehensive income can improve the usability of accounting information or not.This paper does empirical research on the sample data of Shanghai A stock market listing corporation2010-2012years. Based on the price model, research models are constructed, linear regression test is implemented on the value relevance of traditional net profit, total comprehensive income and other comprehensive income, then according to the nature of the enterprise to make further study on three models above. The conclusions of this study are:both comprehensive income and traditional net profit have value relevance, but the value relevance of comprehensive income is lower compared with the traditional net profit; decompositions of the comprehensive income have more value relevance than total comprehensive income; Other comprehensive income does not have incremental value relevance; comprehensive income value relevance has sustained growth trend; the value relevance of comprehensive income is higher than net income of state-owned enterprises, while the value relevance of comprehensive income is lower than net income of non state-owned enterprises.According to the conclusions of this study, several recommendations are putted forward:Increase the propaganda of comprehensive income concept and improve understanding of the comprehensive income; strengthen the comprehensive income effect; strengthen the supervision of the listed company, make sure they will disclose accounting information fully, reduce the earnings management of space management.