Proceedings

two types of different needs of users, to measure the performance of activities, current
operating concept, and to measure enrichment, in a patrimonial conception of the
economic entity, all inclusive concept. According to current operating concept, in
profit and loss account are included only the consequences of operational, normal
activities of the period, and there are reported on equity, the activities that do not
affect the operational activities. These activities are considered as normal, recurring
and allowing to provide the economic entity's future performance. Proponents of
performance assessment based on the result of current operating concept, tend to
measure the managers’s performance, retaining in a restrictive manner, only the
elements controlled by them. According to all inclusive concept, all elements that
affect the increase or decrease in equity during the period, except for the distributions
of dividends or capital decrease through distribution to shareholders or partners, from
their respective contributions, enter in the field of financial performance
measurement. The indicator which allows the calculation of the financial performance
in terms of all inclusive concept is the comprehensive income.
The comprehensive income takes into account both realized gains and losses and
unrealized gains and losses that are directly recognized in equity as being the
consequence not only of factors that can be controlled by the entity through its
management team but also of market factors such as the evolution of market prices, of
the interest rate, of the exchange rate or of the stock market of shares. The category of
gains and losses recorded directly in the equity under IFRS includes: gains and losses
from the revaluation of tangible and intangible fixed assets, gains and losses from the
evaluation of financial instruments that are available for sale, gains and losses from
the risk hedging associated with cash flows and investment in a foreign entity,
exchange differences from the conversion of foreign operations, gains and losses
relating to defined benefit plans, deferred tax relating to items recorded directly in
equity.
The financial statements of an economic entity are important for a wide range of
users: investors, financial lenders, suppliers, customers, employees, the state, and the
general public. We must admit the truth:that the vast majority of information is used
by investors to predict financial statement and the future performance of the
economic entity. This is the reason why investors are first appointed by the IASB as
users of accounting information. In other accounting referentials, such as U.S. GAAP,
investors are the only users, the others being considered auxiliary users who use the
information provided to investors to meet their own needs. Investors who "play" on
the stock exchange by speculating the price variation are considered professional
investors.
Longevitaty of the net income, as main indicator for measuring the financial
performance of an economic entity on the one hand, and the "novelty" of the concept
of comprehensive income that tends to take the place of the net income in measuring
the financial performance of an economic entity, on the other hand, were the
prerequisites for testing the relevance of the two indicators in making decisions on the
sale or on the purchase of shares by professional investors. Consequently, the question
around which this study circumscribe is the following: Which of the indicators: the
net income or the comprehensive income is more relevant to professional investors in
making investment decisions?
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