Research On The Market Reaction Of The Presentation Of Other Comprehensive Income

In 2014, "accounting standards for Enterprises No.30--the presentation of financial statements" (The revised draft) had been issued by the Ministry of Finance improving the presentation on the other comprehensive income again. The revised draft required that items of other comprehensive income should be divided into two types of presentation based on whether it can charge its classification into the profit and losses. So far, we have conducted three large reform of other comprehensive income. Respectively, the new accounting guidelines released in 2006, required enterprises to show comprehensive income as "Gains and losses directly recorded in the owner’s equity" in the statement of changes in owner’s equity. In 2009, Accounting standards Interpretation No. third required enterprises discoursing "other comprehensive income" items in the income statement, and changing owner’s equity the original "directly recorded in the owner the rights and interests of the gains and losses" to "other comprehensive income". The third time was 2014’s revision. Presentation of other comprehensive income changed from the statement of owner’s equity into the income statement, shown China’s adhering to the convergence of international standards and resulted to comprehensive income concept improved gradually in our standards system. The importance of other comprehensive income was creased. While the reforming of presentations form whether increased the understanding of other comprehensive income, and the attention of investors’in our country? That is an important empirical evidence deciding criterion improvement direction in the further.The new accounting standards has implemented since 2006. Listing Corporations cautiously presented other comprehensive income information according to requirements of standards which provides empirical evidence of China for the study of comprehensive income concept from 2007 to 2013. This article used the number that listing Corporation financial disclosures in the announcement and the stock price of the enterprise according to the historical records of the market to research the disclosure of the extent of reaction. Through the contrast before and after 2009, the reaction degree of different presentation form under the market of other comprehensive income found. Other comprehensive income information presentation in the statement of equity will be ignored by investors a certain extent leading to under reaction. When the other comprehensive income information presented in the profit statement, investment will put their attention in it, even leading over reaction. In this case other comprehensive income information is repeated absorption in the stock price. Therefore, the way of reporting comprehensive income still needs to continue to explore and improve. And we should enhance the publicity and explanation of the essence of other comprehensive income, with investment decision for the investors more reasonable use of the information in the accounting statements.