The effects of presentation of unrealized gain or loss of equity instruments on investing decision of investors

Unrealised gain or loss of equity instruments are one of the most important component of statement of comprehensive income for insurance companies. However, IFRS 9 financial instruments standard allows an option on presenting unrealised gain or loss of equity instruments in either statement of profit or loss or statement of other comprehensive income if the equity investment is invested for strategic purpose. This has caused confusion as many users incorporate only total for profit or loss in their analysis, and overlook items presented in other comprehensive income statement. Besides, the volatilities of unrealised gain or loss of equity instruments make statement of comprehensive income volatile and affect investors' decision making. The objective of this study is to examine how presentation of unrealised gain or loss of equity instruments affect investors' decision making, and the interactive effect among presentation of unrealised gain or loss of equity instruments and volatility of unrealised gain or loss of equity instruments on investors' decision making. This is a study which incorporates the behavioural aspects of investors on effects of IFRS 9 adoption of financial reporting. The finding is useful to IASB to improve the content of statement of financial performance ensuring its relevancy and reliability.