Research On The Usefulness Of Credit Decision For Other Comprehensive Income

The list of other comprehensive income makes up for the shortcomings of traditional reports,and provides more comprehensive reference information for users of accounting information to make reasonable decisions,which basically meets the needs of users of accounting information.Whether the other comprehensive earnings disclosed by the enterprise is reliable is directly related to whether the information users can make a reasonable decision.At present,the experts at home and abroad mainly have researches focus on whether the disclosure of other comprehensive income information is of value relevance,and whether other comprehensive income for the creditor's credit decision can provide incremental information during the release of the No.three criteria.The study of cumulative other comprehensive income is scanty.The accumulation for other comprehensive return can forecast the future profitability for enterprises,so we need to have a more comprehensive and standard study of other comprehensive income reporting information on creditors' decision-making based on the previous research.The awareness of the importance of other comprehensive income information disclosure is necessary for enterprises,in that way,the creditors can get a more comprehensive understanding of the future profitability of the company which can be benefit for providing a related loans in time.This paper takes the usefulness of other comprehensive income disclosed by listed companies to the creditor's credit decision making as the research object,based on the previous research results,it takes the information asymmetry theory and the principal-agent theory as the theoretical basis,making a clear define for the related concepts of other comprehensive income and its construction projects,creditors and credit decisions.This paper selects a sample of 1478 from Shanghai stock exchange and Shenzhen stock exchange A share from 2009 to 2015,a total of 214 companies as the research object,in other comprehensive income and accumulated other comprehensive income as an explanatory variable,with the net increase of enterprise long-term loans and short-term borrowing net increase as the substitution variable of explanatory variables,and puts forward relevant hypothesis.It also uses the research methods of Yao Lijie,et al.(2010)and Hu Guoqiang and Ouyang Aiping(2014)to study whether other comprehensive income has an incremental information content for creditors' credit decisions.The results show that the disclosure of other comprehensive income not only has an impact on the long-term loan decisions of creditors,but also on the short-term loan decisions.At the same time,it also influence the enterprise accumulated other comprehensive income from holding the asset or liability to the disposal of the assets or liabilities that may occur in the process of gain and loss.It is not only have an incremental information for the long-term borrowing decisions of creditors,but also for a short-term loans.However,compared with other comprehensive income,other comprehensive income has a higher information content for creditors' short-term loan decisions,while the accumulated other comprehensive income has higher information content for creditors' long-term borrowings compared with other comprehensive income in this period.Therefore,reporting other comprehensive income in the profit and loss account will help to provide more comprehensive and systematic information to users of accounting information for the make of relevant decisions.