Other Comprehensive Income and the Market's Processing of Earnings Information
Other Comprehensive Income and the Market's Processing of Earnings Information
dc.contributor.author | Edinger, Tonya | |
dc.contributor.author | Moore, Jared | |
dc.contributor.author | Wang, Dilin | |
dc.contributor.author | Berger, Dave | |
dc.date.accessioned | 2018-11-27T19:10:25Z | |
dc.date.available | 2018-11-27T19:10:25Z | |
dc.date.issued | 2018-08-27 | |
dc.description.abstract | This study examines whether OCI items impact the market’s ability to process earnings in the contexts of uncertainty/disagreement among market participants and value-relevance. We find that earnings and OCI gains and losses are individually associated with reduced market uncertainty/disagreement and are positively impounded into share prices by investors. However, we also find that both OCI gains and (especially) losses interact with earnings, weakening 1) the negative relation between earnings and market uncertainty/disagreement and 2) the value-relevance of earnings. Further, we find that the apparent effects of OCI gains and losses on the market’s processing of earnings information are stronger in weak information environments, as measured by analyst following. Our findings suggest that OCI conveys information to the market that is useful but also noisy, thereby potentially hindering the market’s ability to interpret earnings, particularly in weaker information environments. | |
dc.identifier.uri | http://hdl.handle.net/10125/59285 | |
dc.subject | Other comprehensive income | |
dc.subject | Earnings | |
dc.subject | Market uncertainty | |
dc.subject | Market disagreement | |
dc.subject | Value-relevance | |
dc.title | Other Comprehensive Income and the Market's Processing of Earnings Information |
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