How comprehensive is comprehensive income? The value relevance of foreign currency translation adjustments

Research output: Contribution to journalArticle

16 Scopus citations

Abstract

Prior empirical research has been unable to forge an unambiguous link between foreign currency translation adjustments, which are an element of "other items of comprehensive income," and firm valuation. This study adds to the existing literature by empirically testing the value relevance of foreign currency translation adjustments in an earnings and book value model. Interaction terms, which serve as proxies for the theoretical sources of exchange rate exposure, are included in the estimating equation. The main finding of this study is that foreign currency translation adjustments are significantly value relevant when their parameter estimates are allowed to vary in the cross-section.

Original languageEnglish
Pages (from-to)97-122
Number of pages26
JournalJournal of International Financial Management and Accounting
Volume16
Issue number2
DOIs
StatePublished - 1 Jun 2005

Fingerprint Dive into the research topics of 'How comprehensive is comprehensive income? The value relevance of foreign currency translation adjustments'. Together they form a unique fingerprint.

  • Cite this