Open Access

Comparing the Impact of the Net Income Versus the Comprehensive Income Over the Share Price for Companies Listed on the Bucharest Stock Exchange

   | Jan 26, 2021


As a consequence of adopting the IFRS in Romania, starting with 2012, for companies whose securities are admitted for trading on a regulated market, financial reporting demarches include ascertaining the comprehensive income in addition to the net income. The present paper aims at investigating how the share price evolves considering the level of the comprehensive income as compared to the reported net income, in a multiannual empirical study implying panel data analysis through Pooled OLS, Fixed Effects and Random Effects models processed through EViews. Furthermore, the informational and decisional utility of the two main forms of disclosed accounting results (the net income and of the comprehensive income) is examined through a sample of 57 notable companies listed on the Bucharest Stock Exchange. Admittedly, the empirical study findings substantiate the fact that both results categories are significantly associated with the evolution of the share price, rendering a heightened value relevance for the Romanian capital market investors. Moreover, the identified results indicate that from an investor standpoint, the comprehensive income does not bear a greater significance than the net income, the two having comparable impacts over the share price.