Value Relevance Of Other Comprehensive Income

Abstract

Studies on value relevance of other comprehensive income have thus far provided mixed evidence. Prior studies also found that fair value reporting has a significant impact on the value relevance of other comprehensive income. Most studies on value relevance of other comprehensive income focused on developed countries where the capital market is more efficient. In these settings due to the existence of active market, fair valuation of assets may not pose a major problem. Therefore, more studies are needed to better understand the value relevance of such items especially in developing countries which have less efficient market. Thus, this study examined whether other comprehensive income and its components are value relevant in Malaysia as a developing country. In order to fulfill these objectives, this study hypothesized that other comprehensive income and its components are associated with share price. These hypotheses were empirically examined using a sample of 1,419 firm years observations from 2011 to 2013, of firms listed on the Main Market of Bursa Malaysia. The results of Panel Analysis, indicate that other comprehensive and its components are value relevant. These results remain robust after additional analyse.