Title: Comprehensive income information: a user's perspective

Authors: Sylvain Durocher; Anne Fortin

Addresses: Telfer School of Management, University of Ottawa, 55 Laurier East, Ottawa, Ontario, K1N 6N5, Canada ' École des sciences de la gestion, Department of Accounting, Université du Québec à Montréal, C.P. 8888, Succ. Centre-Ville, Montréal, Québec, H3C 3P8, Canada

Abstract: The goal of this experimental study was to examine whether nonprofessional investors actually use comprehensive income (CI) in their financial calculations and analyses. We assessed how these actors process actuarial gains and losses on defined benefit pension plans as an "other comprehensive income" (OCI) item, and whether the presentation format for CI affects their judgements and decisions, while considering the directional impact of the OCI item (actuarial loss or actuarial gain). Using 125 Canadian MBA students as proxies for nonprofessional investors, we conclude that nonprofessional investors generally do not use CI, are not affected by its presentation format, and are influenced in relatively few of their judgements by the direction of the OCI item's impact. These findings have important implications for standard setters, who may wish to better conceptualise the CI concept and revisit their current emphasis on CI information.

Keywords: actuarial gains; actuarial losses; behavioural accounting; comprehensive income information; experimental study; nonprofessional investors; presentation format; financial analysis; pension plans.

DOI: 10.1504/IJBAF.2015.071043

International Journal of Behavioural Accounting and Finance, 2015 Vol.5 No.1, pp.27 - 56

Received: 08 Aug 2014
Accepted: 28 Jan 2015
Published online: 09 Aug 2015 *

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