Research On The Value Relevance Of Other Comprehensive Income Based On Criterion Change

With the rapid development of economy and the diversification of business activities,the traditional income based on historical cost principle,realizing-matching principle and prudent principle is unable to meet the demand of investors in the market.To address this issue,FASB,ASB and IASB have successively proposed and continuously refined other comprehensive income statements.In order to adapt to the new situation and achieve the convergence of international accounting standards,China's Accounting Standards Committee reporting guidelines on other comprehensive income have been constantly revised.In 2009,our country formally introduced the concept of other comprehensive income,stipulating the specific items of other comprehensive income to be disclosed in the notes of the profit statement.In 2014,our Ministry of Finance promulgated the Enterprise Accounting Standard Interpretation No.3rd,which suggested that OCI should be classified in the profit statement.The requirements of accounting standards on the disclosure of other comprehensive income have been increasing,which fully embodies the importance of the information content of the Accounting Standards committee in China.In the past,scholars have focused on the value relevance of other comprehensive income,and have not reached a unanimous conclusion.Secondly,some scholars have conducted an effective evaluation of the rationality of the accounting standards reform,and found that the changes of other comprehensive income presentation influence the value relevance,but few scholars have studied the policy effect of the revision of the accounting standards in 2014.Will the 2014 accounting standards which stipulate the classification of OCI in the income statement would affect the value relevance?Does the revision of accounting standards in 2014 have practical value and practical significance?Is it reasonable to classify and report other comprehensive income according to two categories of classification?Based on the background of the revision of accounting standards in 2014 and the analysis of other comprehensive income,the following research is carried out:(1)Does the change of the criteria in 2014 improve the value correlation of OCI?(2)Is it reasonable to require that the new accounting standards for 2014 be classified according to two categories of reclassified income?(3)What are the value correlations of the itemized items on the basis of classified presentation?This paper is based on other comprehensive income data disclosed by listed companies in Shanghai and Shenzhen for 2010-2015 years,first of all,the influence of the reform of the new accounting standards on the correlation of the value of the other comprehensive income was tested by the regression of the total sample regression and the grouping sample;And then,by studying the value relativity of the two categories of other comprehensive income,the rationality of the standard revision of other comprehensive income classification was tested;At last,this paper studies the value relevance of the items of OCI.The study found that:(1)The revision of the new accounting standards in 2014 significantly raised the value correlation of OCI;(2)The value correlation of the two classification categories,which can be reclassified into the profit and loss has significant value correlation,and which cannot be reclassified into gains and losses are not of value relevance;(3)In other comprehensive income specific projects which can be reclassified into the profit and loss,profits and losses arising from changes in the fair value of financial assets available for sale,balance of foreign currency statements and other comprehensive income share in the invested units have significant value relevance.This article is segmented into the following six sections.Above all,this paper introduce the subject of the research,points out the research method and the research framework,and puts forward the significance of the research;In the second chapter,the author reviews the research literatures of three aspects,such as the value relativity of other comprehensive income,the value relativity of other comprehensive income and the impact of other comprehensive income disclosure on the value correlation.On the basis of the existing literatures,the research perspective of this paper is found and summarized;The third chapter is the theory analysis and the hypothesis,and introduces the theory of other comprehensive income value relativity,the theory of efficient market hypothesis and the asymmetric information.On the basis of relevant theoretical analysis,this paper puts forward two hypotheses;The fourth chapter studies the design,and makes a sample choice,the selection of variables and the construction of the model for the fifth chapter;The fifth chapter consist of the empirical analysis,the further analysis and robustness of the test;The sixth chapter consist of the conclusions and recommendations,point out the limitations of this study and the future development of this field on the basis of the conclusions of the study,and relevant recommendations were made for the standard-setting bodies and regulatory authorities.While inheriting the research results,the following innovations have been made:(1)This paper explores the impact of the revision of new accounting standards in 2014 on the relevance of other comprehensive income values,it makes up for the shortage of domestic scholars to study the policy effect of the 2014 standard reform;(2)This paper studies the value relativity of two classification categories of other comprehensive income,and also enriches the content of other comprehensive income while testing the rationality of the standard reform.(3)In the further analysis,the paper adopts other comprehensive income items in 2010-2015 as the sample,and makes a more systematic and comprehensive study on the value relativity of concrete components of other comprehensive income.