Analysts’ Earnings Forecasts and Other Comprehensive Income

35 Pages Posted: 18 Jan 2014

Date Written: March 20, 2013


I empirically investigate the decision usefulness of mandatory reporting of comprehensive income in Canada under the erstwhile Accounting handbook section 1530. Comprehensive income (CI) equals the sum of Net Income (NI) and Other Comprehensive Income (OCI). I operationalize decision usefulness in terms of the association of OCI with analysts’ earnings forecasts and forecast errors. My sample consists of firms listed on the Toronto Stock Exchange. I find that aggregate OCI and two of its components - unrealized gains and losses on available for sale securities (SEC) and unrealized gains and losses on cash flow hedges (HEDGE) - are significantly associated with analysts’ earnings forecasts. I also find that aggregate OCI, SEC and HEDGE are negatively significantly associated with analysts’ forecast errors. I interpret these results as suggesting that aggregate OCI and at least some of its individual components are decision useful for analysts.

Keywords: comprehensive income, analysts forecasts

JEL Classification: A00, C29

Suggested Citation

Deol, Harjinder, Analysts’ Earnings Forecasts and Other Comprehensive Income (March 20, 2013). Available at SSRN: or

Harjinder Deol (Contact Author)

Mount Royal University ( email )

4825 Richard Road SW
Calgary, Alberta T3E 6K6
403-440-8647 (Phone)

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