Information Content of IFRS versus Domestic Accounting Standards: Evidence from Finland

Jarva, Henry; Lantto, Anna-Maija

doi:10.2139/ssrn.1588087

Cited by 28 publications

(28 citation statements)

References 52 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…As for now, the value relevance of equity book value during the IFRS convergence are considered as stable. This evidence is tend to support previous studies that find no proof of value relevance improvement attributed to IFRS adoption (Schiebel 2006), Jarva and Lantto (2011)). However, the value relevance of operating cashflow shows a significant incremental for 2009-2011, continued …”

Section: Symultant Value Relevance Of Accounting Information During Tsupporting

confidence: 89%

See 1 more Smart Citation

Does IFRS Convergence Promote the Value Relevance of Accounting Information?

Kristanto

2016

jeb

View full text Add to dashboard Cite

show abstract

Section: Symultant Value Relevance Of Accounting Information During Tsupporting

confidence: 89%

“…Some researches find value relevance improvement on IFRS based financial statement (Capkun et al, 2008;Devalle et al, 2010;Li and Park 2011). Otherwise, several studies found no value relevance improvement subject to IFRS adoption (Schiebel 2006;Jarva and Lantto 2011).…”

Section: Value Relevance and Ifrs Convergencementioning

confidence: 99%

Does IFRS Convergence Promote the Value Relevance of Accounting Information?

Kristanto

2016

jeb

View full text Add to dashboard Cite

show abstract

“…In turn, Jarva and Lantto (2012), when analyzing the IFRS vis-à-vis Finnish accounting standards, noted that profits calculated in accordance with the IFRS are less timely, although they marginally provide a higher predictive capability of future cash flows. Furthermore, the authors noted that assets and liabilities under those standards have a lower association with share prices.…”

Section: Previous Studiesmentioning

confidence: 99%

“…International studies, particularly in European countries, have examined this topic and have advanced the understanding of the effects of the adoption of IFRS on accounting information itself and on the users of that information (Ashbaugh & Pincus, 2001;Barth et al, 2008;Garanina & Kormiltseva, 2014;Kargin, 2013;Jarva & Lantto, 2012;Landsman, Maydew, & Thornock, 2012;Soderstrom & Sun, 2007).…”

Section: Introductionmentioning

confidence: 99%

Effect of the Adoption of IFRS on the Information Relevance of Accounting Profits in Brazil

Santos

Cavalcante

2014

Rev. contab. finanç.

View full text Add to dashboard Cite

This study aimed to assess the effect of adopting the International Financial Reporting Standards (IFRS) in Brazil on the information relevance of accounting profits of publicly traded companies. International studies have shown that the adoption of IFRS improves the quality of accounting information compared with domestic accounting standards. Concurrent evidence is sparse in Brazil. Information relevance is understood herein as a multidimensional attribute that is closely related to the quality and usefulness of the information conveyed by accounting profits. The associative capacity and information timeliness of accounting profits in relation to share prices were examined. Furthermore, the level of conditional conservatism present in accounting profits was also analyzed because according to Basu (1997), this aspect is related to timeliness. The study used pooled regressions and panel data models to analyze the quarterly accounting profits of 246 companies between the first quarter of 1999 and the first quarter of 2013, resulting in 9,558 quarter-company observations. The results indicated that the adoption of IFRS in Brazil (1) increased the associative capacity of accounting profits; (2) reduced information timeliness to non-significant levels; and (3) had no effect on conditional conservatism. The joint analysis of the empirical evidence from the present study conclusively precludes stating that the adoption of IFRS in Brazil contributed to an increase the information relevance of accounting profits of publicly traded companies.

show abstract

“…Prior studies have reported conflicting results on the value relevance of IFRS. Jarva and Lantto (2012) analysed the information content of financial statements based on IFRS in a mandatory adoption regime in Finland. They found that book values of assets and liabilities measured under IFRS are no more value relevant than they are under Finnish Accounting Standards.…”

Section: Ifrs Adoption and Value Relevance Of Financial Statementsmentioning

confidence: 99%

Analysis of Hidden Value and Value Relevance of Financial Statements Pre- and Post-IFRS Adoption

Garg¹

2017

JMAA

View full text Add to dashboard Cite

This study analyses the hidden value and value relevance of financial statements pre-and post-IFRS (International Financial Reporting Standards) adoption. Prior studies on IFRS adoption provide conflicting evidence on value relevance. Market-to-book ratio and IFRS adoption value relevance using price is examined for Australian listed firms. Results show that IFRS adoption is value relevant over a longer period of time. Results are opposite for profit-making firms compared to loss-making firms which may explain the conflicting results. In the presence of goodwill, IFRS is not value relevant when post-global financial crisis (GFC) period is included. Market-to-book ratio has increased in the post-IFRS period lowering the usefulness of financial statements. Moreover, results show that macro-economic changes affecting valuation of firms may explain for differences in the results for market-to-book ratio and value relevance in different jurisdictions and time periods. Keywords: goodwill, hidden value, International Financial Reporting Standards (IFRS), impairment, value relevance IntroductionSeveral studies around the world have examined the benefits of International Financial Reporting Standards (IFRS) adoption. But the results from these studies provide conflicting evidence. This makes it difficult to draw definitive conclusions about the benefits of IFRS adoption. Different regimes have used varying approaches on goodwill recognition prior to IFRS adoption. Therefore, while IFRS adoption had a uniform impact on the way goodwill is reported and impaired, in the pre-IFRS regime, there are differences across jurisdictions that adopted IFRS.In Australia, a key difference in IFRS is the impairment of goodwill as opposed to systematic amortization as in previous years. This study tries to examine the reason behind the inconclusive results using goodwill and segregation of firms based on profitability as key accounting items. The value relevance of IFRS is analysed over a longer period of time. Moreover, the study examines the usefulness of financial statements pre-and post-IFRS adoption and explores whether the usefulness has increased or decreased over a longer period of time.Market-to-book ratio of the Standard & Poor's 500 over the past two decades rose from just over one in the early eighties to a peak of six by 2000, falling back to 4.5 by late (Beattie & Thomson, 2005. Such large changes in the difference between market value of equity and book value of equity suggest over the last 20 years that the usefulness of financial accounting has reduced significantly. Lev (2002) suggested that the difficulty of valuing firms that deal with concepts, rather than tangible assets and growing size makes an Mukesh Garg, Lecturer, Department of Accounting, Monash University. Email: mukesh.garg@monash.edu. economy more susceptible to Enron type collapses. Lev and Zarowin (1999) provided evidence which indicates that the usefulness of reported earnings, cash flows, and book (equity) values has been deteriorating over the past two...

show abstract

Information Content of IFRS versus Domestic Accounting Standards: Evidence from Finland

Cited by 28 publications

References 52 publications

Does IFRS Convergence Promote the Value Relevance of Accounting Information?

Does IFRS Convergence Promote the Value Relevance of Accounting Information?

Effect of the Adoption of IFRS on the Information Relevance of Accounting Profits in Brazil

Analysis of Hidden Value and Value Relevance of Financial Statements Pre- and Post-IFRS Adoption

Contact Info

Product

Resources

About