IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v17y2024i11p508-d1520370.html
   My bibliography  Save this article

Other Comprehensive Income: Do Nonprofessional Investors Value It as Much as Net Income?

Author

Listed:
  • Ning Du

    (School of Accountancy and Management Information Systems, DePaul University, DePaul Center, Chicago, IL 60604, USA)

  • Ray Whittington

    (School of Accountancy and Management Information Systems, DePaul University, DePaul Center, Chicago, IL 60604, USA)

Abstract

This study examines how investors incorporate unrealized gains or losses reported in Other Comprehensive Income (OCI) into their investment judgments. Since unrealized gains or losses can be presented in either OCI or net income—gains from trading securities are included in net income, while those from available-for-sale securities are reported in OCI (ASC 320 and ASC 851)—it raises the question of whether OCI items are perceived as equally significant as net income items. To explore this, we conducted a 2 × 2 experiment with 240 individual investors, manipulating the presentation of unrealized gains or losses in either net income or OCI. Our findings reveal that unrealized gains are valued significantly lower when presented in OCI compared to net income, indicating that investors see OCI-reported gains as less relevant. However, for unrealized losses, the incorporation degree remained consistent across both presentations, reflecting a general aversion to unrealized losses regardless of how they are reported.

Suggested Citation

  • Ning Du & Ray Whittington, 2024. "Other Comprehensive Income: Do Nonprofessional Investors Value It as Much as Net Income?," JRFM, MDPI, vol. 17(11), pages 1-17, November.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:11:p:508-:d:1520370
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/17/11/508/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/17/11/508/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peterson, Robert A, 1994. "A Meta-analysis of Cronbach's Coefficient Alpha," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 21(2), pages 381-391, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joseph A. Cazier & Benjamin B. M. Shao & Robert D. St. Louis, 2007. "Sharing information and building trust through value congruence," Information Systems Frontiers, Springer, vol. 9(5), pages 515-529, November.
    2. Haase, Janina & Wiedmann, Klaus-Peter & Labenz, Franziska, 2022. "Brand hate, rage, anger & co.: Exploring the relevance and characteristics of negative consumer emotions toward brands," Journal of Business Research, Elsevier, vol. 152(C), pages 1-16.
    3. Sirén, Charlotta & Kohtamäki, Marko, 2016. "Stretching strategic learning to the limit: The interaction between strategic planning and learning," Journal of Business Research, Elsevier, vol. 69(2), pages 653-663.
    4. Huarng, Kun-Huang & Yu, Tiffany Hui-Kuang & Lee, Cheng fang, 2022. "Adoption model of healthcare wearable devices," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    5. Yoonsun Oh & Jungsuk Oh, 2017. "A critical incident approach to consumer response in the smartphone market: product, service and contents," Information Systems and e-Business Management, Springer, vol. 15(3), pages 577-597, August.
    6. Maria Naether & Janine Stratmann & Christina Bendfeldt & Ludwig Theuvsen, 2015. "Wodurch wird die Arbeitszufriedenheit landwirtschaftlicher Arbeitnehmer beeinflusst?," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 8(1), pages 85-96.
    7. S. Rajeswari & Yarlagadda Srinivasulu & S. Thiyagarajan, 2017. "Relationship among Service Quality, Customer Satisfaction and Customer Loyalty: With Special Reference to Wireline Telecom Sector (DSL Service)," Global Business Review, International Management Institute, vol. 18(4), pages 1041-1058, August.
    8. Su Jin Kang & Wonseok Seo, 2020. "The Effects of Multilayered Disorder Characteristics on Fear of Crime in Korea," IJERPH, MDPI, vol. 17(24), pages 1-22, December.
    9. Mark Heitmann & Andreas Herrmann, 2007. "Die Zufriedenheit mit dem Entscheidungsprozess als Determinante der Kundenbindung," Schmalenbach Journal of Business Research, Springer, vol. 59(5), pages 530-566, August.
    10. Catherine Viot & André Le Roux & Florence Kremer, 2014. "Attitude towards the purchase of counterfeits: Antecedents and effect on intention to purchase," Post-Print halshs-02530136, HAL.
    11. Le Thanh Tiep & Ngo Quang Huan & Tran Thi Thuy Hong, 2020. "The Impact of Renewable Energy on Sustainable Economic Growth in Vietnam," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 359-369.
    12. Herjanto, Halimin & Amin, Muslim & Purington, Elizabeth F., 2021. "Panic buying: The effect of thinking style and situational ambiguity," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    13. Tor Guimaraes & Ketan Paranjape & Mike Cornick & Curtis P. Armstrong, 2018. "Empirically Testing Factors Increasing Manufacturing Product Innovation Success," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(02), pages 1-26, April.
    14. Patrick Kunle Adeosun LADIPO & Ismail Tubosun AREBI & Olushola Solomon AKEKE & Babatunde BISIRIYU, 2021. "Effect Of Customer Service On Corporate Competitive Advantage In The Nigerian Telecoms Service Industry," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(2), pages 212-229, November.
    15. Céline Desmoulins, 2021. "Reputation measurement: a tool for ski station applied to Isère Mountain," Post-Print hal-03149407, HAL.
    16. Pelet, Jean-Éric & Durrieu, François & Lick, Erhard, 2020. "Label design of wines sold online: Effects of perceived authenticity on purchase intentions," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    17. Vuong Duc Hoang Quan & Trinh Hoang Nam, 2017. "Developing credit card market from Vietnamese consumers’ perspective," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 7(1), pages 61-74.
    18. Hsu, Chia-Jui & Yen, Jin-Ru & Chang, Yu-Chun & Woon, Hui Kee, 2016. "How do the services of low cost carriers affect passengers' behavioral intentions to revisit a destination?," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 111-116.
    19. Cheng, Xiu & Wu, Fan & Li, Wenbo & Yang, Jiameng & Long, Ruyin, 2024. "What maintains low-carbon consumption behaviors: Evidence from China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 189(PB).
    20. Andor, Mark A. & Lange, Andreas & Sommer, Stephan, 2022. "Fairness and the support of redistributive environmental policies," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:17:y:2024:i:11:p:508-:d:1520370. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.