The role of other comprehensive income in analyst valuation: profitability, perception and performance

IF 2.4 Q2 BUSINESS, FINANCE
Ning Du, Jeffrey Byrne, Robert Knisley, Dwayne Powell, James Valentine
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引用次数: 0

Abstract

Purpose

This study aims to examine how financial analysts evaluate other comprehensive income (OCI) information with a focus on the information content and economic substance of OCI gain and loss.

Design/methodology/approach

This study conducted a 2 × 2 between-subject experiment by manipulating profitability (net profit or net loss) and OCI (OCI gain or loss). A total of 103 equity research analysts participated in the experiment.

Findings

The results show that when the company suffers a net loss, the presence of unrealized gain in OCI appears to cause concern for analysts, in that they assigned a lower valuation to the OCI gain company than the OCI loss company. However, in the cases where the company is profitable, analysts appeared to respond to the direction of OCI (i.e. gain or loss) and incorporated the directional information in their valuation judgment.

Originality/value

The experimental results complement prior archival research on OCI valuation. This study extends prior work on OCI’s decision usefulness, improves understanding of the impact of OCI on firm valuation and contributes to the ongoing debate about whether OCI is viewed as a performance measure. The findings indicate that the effect of OCI gains or losses is most pronounced when the company experiences a loss. During such instances, analysts may interpret a combination of net loss and OCI gain as a potential indicator of earnings management opportunities. Consequently, they may perceive it as a signal of deteriorating future financial performance.

其他综合收益在分析师估值中的作用:盈利能力、认知和绩效
目的本研究旨在探讨金融分析师如何评估其他综合收益(OCI)信息,重点关注 OCI 损益的信息内容和经济实质。设计/方法/途径本研究通过操纵盈利能力(净利润或净亏损)和 OCI(OCI 损益),进行了 2 × 2 的主体间实验。结果结果显示,当公司出现净亏损时,OCI 中未实现收益的存在似乎会引起分析师的担忧,因为他们给予 OCI 收益公司的估值低于 OCI 损失公司。然而,在公司盈利的情况下,分析师似乎会对 OCI 的方向(即收益或亏损)做出反应,并将方向信息纳入其估值判断中。这项研究扩展了之前关于OCI决策有用性的研究,加深了人们对OCI对公司估值影响的理解,并为目前关于是否将OCI视为业绩衡量指标的争论做出了贡献。研究结果表明,当公司出现亏损时,OCI 损益的影响最为明显。在这种情况下,分析师可能会将净亏损和 OCI 收益的组合解释为盈利管理机会的潜在指标。因此,他们可能认为这是未来财务业绩恶化的信号。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
Accounting Research Journal
Accounting Research Journal BUSINESS, FINANCE-
CiteScore
5.00
自引率
0.00%
发文量
13
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