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Reporting comprehensive income: Does it really affect stock prices? by Pamela A. Smith; Senyo Tse is a Business, Management and Accounting article available to read on EtoBox.
What is Reporting comprehensive income: Does it really affect stock prices? about?
Financial statement preparers have resisted reporting comprehensive income. They argue that it could adversely affect company stock price. But are they correct? wo independent studies indicate that security market value is not generally T associated with comprehensive income items. Financial statement users have demanded an all-inclusive measure of financial performance that includes information regarding comprehensive income items. In response, the FASB now requires the reporting of comprehensive income in a statement of performance. Financial statement preparers have resisted reporting comprehensive income, maintaining that comprehensive income items have no cash flow implications, and are therefore not value-relevant. In addition, preparers argue that comprehensive income items would increase earnings volatility even though the firm's riskiness is unchanged. Preparers argue that if comprehensive income is given heightened visibility, investors would erroneously infer cash flow implications from the resulting income, and this could penalize the stock price. This article presents the arguments concerning the reporting of comprehensive income from a user and preparer perspective, t
Who reads Reporting comprehensive income: Does it really affect stock prices??
It is typically read by researchers, students, and practitioners in Business, Management and Accounting.
- Author
- Pamela A. Smith; Senyo Tse
- Publisher
- John Wiley and Sons; Wiley (John Wiley & Sons); Wiley (ISSN 1044-8136)
- Published
- 1998
- Language
- EN
- Field
- Business, Management and Accounting (Social Sciences)