Information conveyances: disaggregated accounting earnings and decomposed other comprehensive income accelerations

Tri Utami, Slamet Sugiri, Abdul Halim and Sumiyana Sumiyana

Accounting Research Journal, 2025, vol. 38, issue 3-4, 364-386

Abstract: PurposeThe purpose of this study is to examine the effect of disaggregated earnings acceleration on stock prices or returns. Moreover, this study investigates the acceleration of separated other comprehensive income affecting information conveyance.Design/methodology/approachThis study’s sample is 18 Asia-Pacific countries in 2010–2021. Furthermore, this study examines the impact of decomposed earnings and OCI accelerations in eight cluster models. This research uses the OLS regression for examining EAT, GROSS, EBIT, EBITDA and other comprehensive income’s (OCI) component to determine information conveyance and incremental informativeness of accounting earnings.FindingsFirstly, this study indicates that decomposition accounting earnings, based on the distributions, inform prices or stock returns with higher value relevance. Secondly, separated OCI acceleration presents incremental information that comprehends the adaptation-recursion theories. Thirdly, this study suggests that information content measurement becomes clearer based on asset adaptation and physical capital maintenance concept. Likewise, the acceleration of OCI’s component comprehends the incremental informativeness of traditional accounting earnings acceleration because of the combined adaptation-recursion theory.Originality/valueMost extant research has explained the information content of earnings acceleration through aggregated traditional profit over the components of earnings formation. This study then uses disaggregated accounting earnings, which transforms the information content of earnings distributed to the firms, creditors and investors. In addition, this study uses the accounting earnings and economic earnings by using the capital maintenance concept.

Keywords: Acceleration; Disaggregation; Earnings distribution; Comprehensive income; Information contents (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-03-2024-0095

DOI: 10.1108/ARJ-03-2024-0095

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