The incremental usefulness of other comprehensive income items to the Egyptian investor Online publication date: Wed, 06-Aug-2014
by Ahmed F. Elbayoumi; Emad A. Awadallah
International Journal of Economics and Accounting (IJEA), Vol. 3, No. 3/4, 2012
Abstract: We examine whether the incremental usefulness of the other comprehensive income (OCI) items relative to net income changed or not after the issuance of the Egyptian Accounting Standard number 1 (post-EAS 1). We also seek to depict inferences concerning which component(s) of OCI is more useful to the Egyptian investor. For the non-financial firms in the post-EAS 1 period, the aggregated OCI has a significant usefulness in explaining the following period's cash flows. Regarding financial firms in the period before the issuance of the Egyptian Accounting Standard number 1 (pre-EAS 1) and non-financial firms in the post-EAS 1, it was observed that foreign currency adjustments has significant usefulness in explaining the following period' cash flows. Regarding the financial firms, foreign currency adjustments component is significantly useful in explaining stock returns. Marketable securities adjustments are significantly useful in explaining stock returns for the non-financial firms in the post-EAS 1 period.
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