This paper investigates the relationship between value relevance of the multi-step income statement and managerial opportunistic behavior. In Japan, net income is disclosed by three steps, i.e., 1) operating profits from core operating activity, 2) ordinary income, measured by adding gains and...

The purpose of this paper is to compare the usefulness between net income and comprehensive income. The results by SUR (seemingly unrelated regression) show the following evidence. Although net income is more persistent than comprehensive income in one year, the persistence of comprehensive...

This paper investigates the value relevance of earnings components in the income statement, paying attention to the inter-period allocation of earnings. While prior studies only examine the pattern of allocation, this research examines both the relationship between the components in the year and...

In 2000, the reform of consolidated financial statements changed the income statement section where amortization of goodwill and gains and losses from interest method should be disclosed. The results in this paper show that the reform may improve the value relevance of operating profits and...

This paper investigates the value relevance of earnings and the explanatory power of earnings for subsequent returns. This analysis, at the same time, examines the efficiency of capital markets. The targets of this paper are two class of returns over different periods. Cross-sectional analysis...

This paper reviews the literature on bankruptcy analysis, focusing on the association (the logical linkage) between hazard model and going-concern opinion. Hazard model is a technique that can test the relative impact on the bankruptcy risk of a particular factor, but not a technique that...

The purpose of this paper is to investigate the value relevance of the legally mandated provisions. This paper examines the effects of changes in provisions on the value relevance of earnings. The results show that the calculation of provisions will deteriorate the relevance of earnings when the...

Under present financial accounting standards, in Japan and in U.S., firms can hoose pension discount rates, which they use for earnings measurement, at their discretion. First, this paper investigates, what factors affect their choice of pension discount rates. The sample firms in this paper...

Recently, many people criticize the traditionally accepted principles of realization, matching, and allocation. In addition, the reporting performance project in the International Accounting Standards Board (IASB) is willing to substitute the extant concept of net income for the unexperienced...

This paper investigates the value relevance of segment earnings in railroad companies. Operating profits in transportation and real estate business are value relevant. While operating losses in leisure business contains large noise, positive earnings is value relevant. Earnings in other segments...