Academic Research and Standard Setting: The Case of Other Comprehensive Income

50 Pages Posted: 26 Mar 2012 Last revised: 7 May 2012

See all articles by Lynn L. Rees

Lynn L. Rees

Utah State University - Huntsman School of Business

Philip B. Shane

College of William & Mary; Monash University; Monash University - Department of Accounting

Date Written: March 26, 2012

Abstract

This paper links academic accounting research on comprehensive income reporting with the accounting standard-setting efforts of the FASB and the IASB. We begin by discussing the development of reporting other comprehensive income and we identify a significant weakness in the FASB’s Conceptual Framework in the lack of a cohesive definition of any subcategory of comprehensive income, including earnings. We identify several attributes that could help allocate comprehensive income between net income, other comprehensive income, and other subcategories. We then review academic research related to remaining standard-setting issues and identify gaps in academic research where hypotheses could be developed and tested. Our objectives are to (1) stimulate standard setters to better conceptualize what is meant by other comprehensive income and to distinguish it from earnings, and (2) stimulate researchers to develop and test hypotheses that might help in that process.

Keywords: other comprehensive income, standard setting, earnings, literature review

JEL Classification: G10, M41

Suggested Citation

Rees, Lynn L. and Shane, Philip B., Academic Research and Standard Setting: The Case of Other Comprehensive Income (March 26, 2012). Accounting Horizons, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2029046 or http://dx.doi.org/10.2139/ssrn.2029046

Lynn L. Rees (Contact Author)

Utah State University - Huntsman School of Business ( email )

3500 Old Main Hill
Logan, UT 84322-3500
United States
435-797-2272 (Phone)

Philip B. Shane

College of William & Mary ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Monash University - Department of Accounting ( email )

H3.43, Building H, Level 3
Monash University Caulfiled
Melbourne, VIC 3145
Australia

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