alireza kian; Omid Pourheydari; Yahya Kamyab
Abstract
Managers use the flexibility of current financial reporting standards to separate or aggregate items of income statement. This feature of the standards has led to separate or aggregate of items in the financial statements as one of the challenging issues for managers. Hence, the purpose ...
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Managers use the flexibility of current financial reporting standards to separate or aggregate items of income statement. This feature of the standards has led to separate or aggregate of items in the financial statements as one of the challenging issues for managers. Hence, the purpose of this research is to investigate thebehavior of managers in applying the theory of mental accounting in income statement reporting. In this regard, this research was conducted through a survey method and in a laboratory environment by distributing a questionnaire between 67 Iranian financial managers participating in IFRS courses in 2016. In this research, a series of experiments related to separate or aggregate information of profit and loss of selling fixed asset were tested to determine whether financial managers preferred to follow the predictions of mental accounting theory or not. To test the hypothesis of the research, repeated measurement of two-way and paired t-test has been used.The results of the research indicate that managers prefer to distinguish mental accounting. Our research has comments to standard setters, legislators, and researchers
