포괄손익보고의 타당성 검증에 관한 연구

In 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 130 (SFAS 130), Reporting Comprehensive Income. For fiscal years beginning after December 15, 1997, SFAS 130 requires the disclosure of both net income and a more ‘comprehensive’ measure of income. Comprehensive income includes four items recorded as owners’ equity under previous FASB pronouncements: adjustments to unrealized gains and losses on available-for-sale marketable securities (SFAS 115), foreign currency translation adjustments (SFAS 52), minimum required pension liability adjustments (SFAS 87), and changes in the market values of certain futures contracts qualifying as hedges (SFAS 80). The International Accounting Standards Board is presently considering a similar requirement. Under those accounting changes in comprehensive income reporting, the Korean Accounting Standards Board is also presently considering reporting comprehensive income. Statement of Korean accounting Standards 16 will mandate comprehensive income disclosures in financial statement. However, research evidence on its usefulness in Korea is not documented and is worth investigating even before reporting comprehensive income is mandated by Statement of Korean Accounting Standards No 16. It is questionable whether this new accounting regulation of comprehensive reporting is more value-relevant. By examining comprehensive income reporting made before this new accounting rule and comparing the explanatory power of comprehensive income and current net income, we try to evaluate the effects and efficacy of Statement of Korean accounting Standards 16 in enhancing the value-relevance of accounting information. The primary objective of this study is to examine the validity of new comprehensive income reporting based on Statement of Korean Accounting Standards No 16. we also investigate whether other comprehensive income items reported in comprehensive income statement are more value-relevant than other comprehensive income items currently reported as a part of equity section according to the current Korean Accounting Standards. If new accounting regulation for comprehensive income is more suitable, we expect to find that other comprehensive income reporting have more explanatory power on stock prices than the current income. Our empirical results show that other comprehensive income items have significant relations with stock prices, however the explanatory power of comprehensive income separately reported in comprehensive income statement is lower than that of comprehensive income items as a part of equity items but for unrealized holding losses on available -for-sale securities, which suggests that unrealized holding losses are better to be reported in income statement from the viewpoint of conservatism. Overall, we find no evidence that other comprehensive incomes on comprehensive income statement is more strongly associated with market value and has more explanatory power than that on equity section in compared with net income on current income statement. Moreover, the only component of other comprehensive income that improves the association between income and prices through comprehensive income statement is the unrealized holding gains on available-for-sale securities. In general, our results do not support the claim that comprehensive income is a better measure of firm performance than net income. Conclusively, our results implies that the regulation for other comprehensive incomes to be reported in notes of the statement of changes in stockholders’ equity in statement of Korean accounting Standards 16 can be regarded to be more valid and suitable during introductory period of comprehensive income reporting. Therefore, further research after actual comprehensive income reporting should be performed for practical implication of other comprehensive income reporting through comprehensive income statement or the statement of changes in stockholders’ equity. However, considering our empirical results are based on as-if analysis and the initial state of comprehensive income reporting in Korea, some of our results and conclusions should not be generalized without further investigation. When actual data on comprehensive income are available, an investigation of subsequent comprehensive income reporting under Korean accounting Standards 16 would produce a more interesting results and provide a better perspective on this issue.