Assessing value relevance of comprehensive income in European banks and other financial institutions

The IAS/IFRS compliant groups have been disclosing comprehensive income since 2009, when the IAS 1-revised became effective. This paper aims to investigate the value relevance of comprehensive income and its components in European banks and other financial institutions. The research has been developed by having a sample of 166 European listed groups whose data have been collected in the 2009, 2010 and 2011 (498 firm-year observations) consolidated financial statements. In contrast to previous findings, related to all the sectors, our research highlights a higher value relevance of comprehensive income in respect to net income. Moving to the single OCI components, our results suggest that gains and losses on remeasuring available-for-sale financial assets (AFSit) are value relevant in European banks and other financial institutions.

Parole chiave:Comprehensive income; net income; value relevance; IAS 1-revised; European listed groups

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Alessandro Mechelli, Riccardo Cimini, Assessing value relevance of comprehensive income in European banks and other financial institutions in "FINANCIAL REPORTING" 1/2013, pp 13-41, DOI: 10.3280/FR2013-001003