The Value Relevance of Comprehensive Income in Nigerian: A Pilot Test

Aliyu Baba Usman, Noor Afza Binti Amran, Hasnah Binti Shaari


This study is motivated by the need to provide contextual evidence on a decade-long debate regarding accounting standards that require firms to measure certain financial assets and liabilities at fair value and to recognize the effect thereof in a statement of Comprehensive Income (CI). Upon the adoption of International Financial Reporting Standards (IFRS) in 2012, Nigerian public interest listed firms are required to report a new summary financial performance indicator known as the CI. This paper investigates the relative value relevance of traditional Net Income (NI) and the Total Comprehensive Income (TCI). We analyzed a sample of 207 firms-year observations comprising of 76 companies listed on the Nigeria Stock Exchange (NSE) for the years 2010 to 2014. While we observed a price and return reactions to the magnitude of both the traditional NI and TCI, our test reveals the supremacy of NI over TCI. By implication, each summary measure is value relevant on an individual basis hence we conclude that both measures reflect information used by the investors.

Keywords: comprehensive income; net income; stock return;  share price

JEL Classification: M

Full Text:



  • There are currently no refbacks.