Value Relevance of net income, other comprehensive income, and comprehensive income in Brazil

Abstract

This paper uses the Ohlson Model to analyze whether Net Income (NI), Other Comprehensive Income (OCI), and Comprehensive Income (CI) are value relevant for market value and the return of shares of publicy-traded Brazilian companies. To maximize the robustness of the results, we inserted the following control variables for each model: equity per Share (EqPS), Size (S), Industry (I), EBITDA per Share (EbPS), Revenue per Share (RePS), Liquidity (L), and Gross Domestic Product Growth (GDPG). The control variables S, RePS, and GDPG were significant for the three models related to the value of the company. The control variables EqPS, EbPS, RePS, and L, on the other hand, were only significant for the three models related to stock returns. Our main variables (NI, OCI, and CI) were found to be statistically significant in five of the six regression models after data analysis in a fixed effect panel using robust standard errors. However, only the variables NI and CI were considered to be relevant in the expected direction, meaning that they offered a positive contribution in explaining the value of the company.

Other Comprehensive Income in the International Financial Reporting Standards: A Literature Review

“…Meichyel & Dewi (2019) show that NI has a positive influence on stock returns; CI, OCI, and high subjectivity OCI have a negative influence on stock returns, and low subjectivity OCI has no effect on stock returns. Bortoli et al (2020) found NI, OCI, and CI to be relevant values for the market value and stock returns of Brazilian public companies. However, only NI and CI contribute positively in explaining company value.…”

Sales levels and asset confiscation penalty among commerce sector taxpayers in Peru

“…En este contexto, surge la pregunta: ¿qué tan útil es conocer cuándo el nivel de ventas es menor al de compras en varios periodos mensuales? Según Bortoli et al (2020), esta interrogante constituye una alerta roja novedosa, ya que los valores de ventas observados por el mercado pueden ser utilizados para predecir y confirmar lo que se esperaba.…”