Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions

MFRS 9 provides an option of presenting the UGLEI with a strategic purpose in either PL or OCI statements. This flexibility raises an issue in investors' judgment which may influence their risk perception and investing decision. As financial reporting involves human decision-making, it is cruci...

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Main Author:	Gan, Chin Yee
Format:	Thesis
Published:	2023
Subjects:	HG4501-6051 Investment capital formation speculation
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id	my-mmu-ep.12863
record_format	uketd_dc
spelling	my-mmu-ep.128632024-08-27T09:02:14Z Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions 2023-04 Gan, Chin Yee HG4501-6051 Investment, capital formation, speculation MFRS 9 provides an option of presenting the UGLEI with a strategic purpose in either PL or OCI statements. This flexibility raises an issue in investors' judgment which may influence their risk perception and investing decision. As financial reporting involves human decision-making, it is crucial to incorporate behavioral aspects in this study. Hence, this study investigates how the alternative presentation of UGLEI with strategic purpose under MFRS 9, when moderate with its volatility and share price stability, affects investors' risk perception and investing decision. This study uses an experimental approach with a psychology framework and efficient market hypothesis to examine the issues identified. A fictitious insurance company case study was developed using a two-by-two-by-two factorial design, with a total of eight manipulated cases to examine the research objectives. 420 professional accountants have been invited to participate in this study, and the final usable sample is 134. The result of this study suggests that the option given under MFRS 9 on the presentation of UGLEI in either Pl or OCI statement alone may not affect investors' risk perception and investing decision. However, when UGLEI was presented in OCI and moderated with the volatility of UGLEI, there was an impact on investing decisions of investors. On the other hand, the UGLEI were found to be risk relevant as there is a moderating effect of the volatility of UGLEI and stability of share price when presenting UGLEI in the statement of PL and under extreme conditions (at nonvolatile UGLEI trend or stable share price trend). 2023-04 Thesis https://shdl.mmu.edu.my/12863/ http://erep.mmu.edu.my/ phd doctoral Multimedia University Faculty of Business (FOB) EREP ID: 12287
institution	Multimedia University
collection	MMU Institutional Repository
topic	HG4501-6051 Investment capital formation speculation
spellingShingle	HG4501-6051 Investment capital formation speculation Gan, Chin Yee Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions
description	MFRS 9 provides an option of presenting the UGLEI with a strategic purpose in either PL or OCI statements. This flexibility raises an issue in investors' judgment which may influence their risk perception and investing decision. As financial reporting involves human decision-making, it is crucial to incorporate behavioral aspects in this study. Hence, this study investigates how the alternative presentation of UGLEI with strategic purpose under MFRS 9, when moderate with its volatility and share price stability, affects investors' risk perception and investing decision. This study uses an experimental approach with a psychology framework and efficient market hypothesis to examine the issues identified. A fictitious insurance company case study was developed using a two-by-two-by-two factorial design, with a total of eight manipulated cases to examine the research objectives. 420 professional accountants have been invited to participate in this study, and the final usable sample is 134. The result of this study suggests that the option given under MFRS 9 on the presentation of UGLEI in either Pl or OCI statement alone may not affect investors' risk perception and investing decision. However, when UGLEI was presented in OCI and moderated with the volatility of UGLEI, there was an impact on investing decisions of investors. On the other hand, the UGLEI were found to be risk relevant as there is a moderating effect of the volatility of UGLEI and stability of share price when presenting UGLEI in the statement of PL and under extreme conditions (at nonvolatile UGLEI trend or stable share price trend).
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Gan, Chin Yee
author_facet	Gan, Chin Yee
author_sort	Gan, Chin Yee
title	Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions
title_short	Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions
title_full	Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions
title_fullStr	Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions
title_full_unstemmed	Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions
title_sort	fair value accounting of equity instruments: the effects of equity instruments presentation format on investors' risk perception and investing decisions
granting_institution	Multimedia University
granting_department	Faculty of Business (FOB)
publishDate	2023
_version_	1811768011349032960

Fair value accounting of equity instruments: The effects of equity instruments presentation format on investors' risk perception and investing decisions

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