The decision whether managers choose to aggregate or disaggregate the income statement items.  The manager is able to make this decision, because there is little guidance with regards to the income statement disaggregation. This give the managers flexibility to choose between whether to disaggregate or aggregate income statement items. Disaggregation means to separately present the underlying components of one or more items in the financial statement, whereas aggregation means to collectively present the components of the financial statement.

In this study there is no normative benchmark whether aggregation or disaggregation of income statement items should be mandated for the effective functioning of the capital markets. However, the normative benchmark is that investors should not make an evaluation of the firm depending on whether the income statement items are aggregated or disaggregated. Any systematic difference between the two presentations of income statement items would be a bias.

An example, investment decisions for projects. When managers/investors decide which project they want to invest, they often look at the highest expected cash flow. However, when looking at the expected cash flow, managers/investors may disregard ethical/sustainable benefits. In the long term, other projects with a less higher expected cash flow, may give a better image to the public, which in turn creates a higher sustainability and company value.