The cold work from the forming process of cold-formed sections causes a significant increase in the strength of the material in corners (the so-called corner material) and the enhanced strength of the corner material has been traditionally determined using semi-empirical models for carbons steel and stainless steel sections. However these semi-empirical models are only applicable to the prediction of the enhanced yield strength (or 0.2% proof stress) but are neither capable of predicting the stress-strain behaviour of the corner material nor able to account for the difference in the mechanical behaviour of the corner material under tension and compression. This paper presents a finite element method for predicting both tensile and compressive stress-strain behaviour of the corner material in cold-formed stainless steel sections which overcomes these difficulties. In this method the effect of cold working on the stress-strain behaviour of the corner material is account for by means of a numerical simulation of the cold forming of corners with the resulting residual stresses and equivalent plastic strains specified as the initial state in a subsequent finite element simulation of corner coupon tests. In this paper the finite element simulation of the cold bending of a stainless steel sheet into a corner is first presented for predicting the coexistent residual stresses and equivalent plastic strains in the corner. Finite element simulations of both tension and compression coupon tests of corner materials are next introduced for predicting the stress-strain behaviour of the corner material. The accuracy of the method is demonstrated by comparing its predictions with experimental stressstrain curves. This method can facilitate a development of a direct relationship between the virgin material properties and the mechanical properties of cold-worked materials (e.g. corner materials and materials taken from cold-formed circular hollow sections) and also a subsequent study of the effect of the corner strength enhancement on the overall strength of cold-formed sections.