This study analyses if comprehensive income is more value relevant than the net income and, if that is the case, what are the elements of the comprehensive income explaining the difference. Our study shows that comprehensive income is a relevant variable both to explain the value of the company and also to explain its return. However, comprehensive income and its variation show to be more relevant than the net income and its variation only when explaining return. As for the components of the comprehensive income, foreign currency adjustments increase usefulness in the return models but cash flow hedges and adjustments due to fair value valuation do not add value relevance to the net income.
|Journal||Revista de Contabilidad-Spanish Accounting Review|
|Publication status||Published - 1 Jan 2011|
- Comprehensive income
- Net income
- Value relevance