Usefulness of accounting information depends on its predicting ability of firms value. Value Relevance of accounting earnings and its components increased predicting power of accounting numbers and enhanced usefulness of accounting information. Hench, this research investigates the value relevance of cash and accruals components of accounting earnings for the firms listed in Tehran Stock Exchange(TSE).
Results of this research shows that cash components of accounting earnings relevant to firm market value. It also shows that prediction ability and explanatory power of cash component is rather than accruals components of earnings.