Comparative Study of Operating Profit with Unoperating profit in Iran Capital Market

Subject Areas : Management Accounting

Sasan Mehrani ¹ , Parisa sadat Behbahaniniya ²

1 - نویسنده اول و مسئول مکاتبات
2 - ندارد

Received: 2014-11-16 Accepted : 2014-11-16 Published : 2008-12-21

Keywords: Value Relevance, Operating income, Big bath theory,

Abstract :

This study investigates the value relevance of operating income versus nonoperating income at Iran capital market. Regarding the main objective ofaccounting practice, value relevance is a concept that has always required moreattention by accountants and regulators. By definition a factor is relevant if itsreflection at asset market`s value is not negligible. For this study in the period1379-1385 companies in each year and totally 581 company/year investigate.We use regression and T test and Wald test. Our results show that operatingincome is more relevant to the market. This result could be consistent with bigbath theory and as a result of market attention to management choice in orderto change non operating income; to achieve their objectives. Consequently thenon operating items have more relevant for the market.