Did the switch to IFRS 11 for joint ventures affect the value relevance of corporate consolidated financial statements? Evidence from France and Italy

Gavana, Giovanna; Gottardo, Pietro; Moisello, Anna Maria

doi:10.1016/j.intaccaudtax.2020.100300

Cited by 9 publications

(11 citation statements)

References 38 publications

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“…where 𝑀𝑉 𝑖𝑡+3𝑚 is the market capitalisation of financial firm i three months following the end of the fiscal year t. 7 𝐵𝑉 𝑖𝑡 is the book value of equity for financial firm i at the end of the fiscal year t, while 𝑁𝐼 𝑖𝑡 is the reported net income of financial firm i for the fiscal year t. Following prior research (e.g., O'Hanlon & Taylor, 2007;Manganaris, Spathis, & Dasilas, 2015;Gavana, Gottardo, & Moisello, 2020), to address the econometric concern regarding heteroskedasticity and scale bias, all accounting and market variables are scaled by lagged total assets for firm i at the end of the fiscal year, i.e. t-1 (Kothari & Zimmerman, 1995).…”

Section: Empirical Modelmentioning

confidence: 99%

Fair value accounting and value relevance of equity book value and net income for European financial firms during the crisis

Adwan

Ismail

Girardone

2020

Journal of International Accounting, Auditing and Taxation

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Section: Empirical Modelmentioning

confidence: 99%

Fair value accounting and value relevance of equity book value and net income for European financial firms during the crisis

Adwan

Ismail

Girardone

2020

Journal of International Accounting, Auditing and Taxation

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“…According to Gavana et al, (2020), a financial statement are presentation of financial position and financial performance in organization. This report shows the history of quantified entities in monetary values.…”

Section: Financial Statementsmentioning

confidence: 99%

Audit Lag Criteria Report as a Determination of the Reliability and Quality of Auditor's Report in Indonesia

Muda¹,

Davis²,

Erlina³

et al. 2020

RWE

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This paperaims to knowthe quality indicatorsof the financial statements which consist of profitability, solvency and reputation of Registered Public Accountant (KAP)to the audit lagwith company size as a moderation variable either partially or simultaneously in LQ45 companies. This research is a comparative causal research with ex post facto approach. Purposive sampling technique is used in this research and there are 18 samples collected by this technique from LQ45 in Indonesia Company Issueryear 2010-2016. The data analyzed research is 126. Data analysis technique used Moderated Regression Analysis (MRA) with the Application ofEviews Software. The study concluded thatstudy showed that solvency, reputation of the public accounting firm and company size had a significant effect on Audit Lag, while profitability had no significant effect on Audit Lag. The size of a company able to moderate the effect of independent variablesto the Audit Lag and not haveto moderate the effect of the profitability to the Audit Lag.

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“…O processo de emissão da IFRS 11 foi bastante controverso (Sarquis & Santos, 2019), tendo em vista que havia uma divergência de opiniões sobre qual desses dois métodos (consolidação proporcional ou equivalência patrimonial) seria mais apropriado para reconhecer as participações em joint ventures. A literatura acadêmica, por exemplo, apresenta evidência de que a informação contábil obtida por meio da consolidação proporcional era mais relevante para os usuários do que a informação contábil obtida pelo método de equivalência patrimonial (Bauman, 2007;Gavana, Gottardo, & Moisello, 2020;Graham, King, & Morrill, 2003;Stoltzfus & Epps, 2005).…”

Section: Introductionunclassified

“…Esta pesquisa apresenta contribuições importantes para a literatura acadêmica, investidores e o mercado de capitais, além dos órgãos reguladores de contabilidade. Primeiramente, este estudo deve contribuir com a literatura abordando o tratamento contábil dos investimentos em joint ventures (Bauman, 2007;Gavana et al, 2020;Graham et al, 2003;Lourenço, Fernandes, & Curto, 2012;Richardson, Roubi, & Soonawalla, 2012;Sarquis, Santos, Lourenço, & Braunbeck, 2020;Stoltzfus & Epps, 2005), pois apresenta evidência de que a mudança recente no tratamento contábil (substituindo o método de consolidação proporcional pelo de equivalência patrimonial) pode ter resultado em perda de informação, especialmente para os investidores menos sofisticados. Também esperamos contribuir para a literatura que objetiva explorar o nível de conformidade das empresas com as exigências de divulgação (Che Azmi & English, 2016;Glaum et al, 2013;Izzo et al, 2013;Lucas & Lourenço, 2014;Mazzi et al, 2017;Sarquis et al, 2021;Tsalavoutas et al, 2020), e estudos que discutem as diferenças entre o reconhecimento de um item nas demonstrações contábeis ou apenas a sua divulgação nas notas explicativas às demonstrações financeiras (Ahmed et al, 2006;Michels, 2017;Müller et al, 2015;Schipper, 2007;Yu, 2013).…”

Section: Introductionunclassified

How financial information about joint ventures is being disclosed and processed by the market

Sarquis

Santana

Santos

2022

REPeC

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Objective: This research aims to evaluate how the joint ventures’ financial information is being disclosed in the notes to the joint venturer’s financial statements and how this disclosed information is being processed by the market, exploring the mediating effect of investors’ level of sophistication. Methods: Using a sample of 1,858 financial statements from 551 firms from 26 countries, we hand collected the financial information of interests in joint ventures from the notes to the financial statements. Using a descriptive analysis, we first analyzed how firms are disclosing this information. Following, using a value relevance model, we evaluated whether this information is incorporated into stock prices. Results: We show that IFRS 11 adoption and the elimination of proportionate consolidation resulted in a loss of information given that firms are not disclosing in the notes the financial information of their joint ventures as required by IFRS 12, and, even for those firms that are disclosing (57%), this information is only absorbed by more sophisticated investors. Contributions: This research contributes not only to the previous literature (joint ventures’ accounting treatment, disclosure compliance and recognition versus disclosure), but also to the IASB during the Post-Implementation Review (PIR) of IFRS 11/12 and the Disclosure Initiative.

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Did the switch to IFRS 11 for joint ventures affect the value relevance of corporate consolidated financial statements? Evidence from France and Italy

Cited by 9 publications

References 38 publications

Fair value accounting and value relevance of equity book value and net income for European financial firms during the crisis

Fair value accounting and value relevance of equity book value and net income for European financial firms during the crisis

Audit Lag Criteria Report as a Determination of the Reliability and Quality of Auditor's Report in Indonesia

How financial information about joint ventures is being disclosed and processed by the market

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