2004 Fiscal Year Final Research Report Summary
THE SYSTEMATIC STUDY OF COMPREHENSIVE INCOME : THEORETICAL ANALYSIS AND EMPIRICAL ANALYSIS
| Project/Area Number |
14330042
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| Research Category |
Grant-in-Aid for Scientific Research (B)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Accounting
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| Research Institution | MUSASHI UNIVERSITY |
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Principal Investigator |
MAEDA Sadayoshi MUSASHI UNIVERSITY, FACULTY OF ECONOMICS, PROFESSOR, 経済学部, 教授 (80061414)
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| Co-Investigator(Kenkyū-buntansha) |
KUBOTA Keiichi MUSASHI UNIVERSITY, FACULTY OF ECONOMICS, PROFESSOR, 経済学部, 教授 (00120858)
OHTA Koji MUSASHI UNIVERSITY, FACULTY OF ECONOMICS, ASSOCIATE PROFESSOR, 経済学部, 助教授 (70366839)
YOKOTA Eri KEIO UNIVERSITY, DEPARTMENT OF COMMERCE, PROFESSOR, 商学部, 教授 (20277700)
TSUJIYAMA Eiko WASEDA UNIVERSITY, DEPARTMENT OF COMMERCE, PROFESSOR, 商学部, 教授 (50114020)
TAKEHARA Hitoshi UNIVERSITY OF TSUKUBA, GRADUATE SCHOOL OF SYSTEMS AND INFORMATION ENGINEERING, ASSOCIATE PROFESSOR, 大学院・システム情報工学研究科, 助教授 (70261782)
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| Project Period (FY) |
2002 – 2004
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| Keywords | Other comprehensive income / SEC disclosure standards / Market inefficiency / Asset-liabilities view / International Accounting Standards / Deferred taxes / the Cost of capital / Accruals |
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| Research Abstract |
From the theoretical point of view we have analyzed the problem from three viewpoints : accounting standards, performance measurement, and tax accounting. We have shown that the recycling is imperative to the sound income measurement, managers' good performance measurement, and the correct measurement of asset and liabilities fair value with deferred tax accounts. From the empirical point of view, we have conducted the extensive questionnaire studies among Japanese chief accounting officers and find that they think the net income reporting is important both for disclosure purposes and performance measurement purposes, even after the comprehensive income and other comprehensive income items are going to be required to be reported. Also, using the sample of Japanese firms who disclose their financial statements based on 10-K format, we have shown the other comprehensive items have additional information content With regard to the general market inefficiency questions, we have also extensively tested the information content of accounting accruals and find that the market initially overreact to the accounting reports and then gradually the stock price gets readjusted and fully incorporates the implications of earnings management behavior. The evidence is important in the sense that, in setting the sound accounting standards in the U.S.A. as well as in other countries, it is assumed that the financial assets are fairly priced. Thus the measurement of the changes in value in real assets is more controversial if reflecting the fair price information in the stock price is the imperative function that the accounting reports have to fulfill.
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