TY - JOUR
T1 - Changes in value relevance of accounting information upon IFRS adoption
T2 - Evidence from australia
AU - Chalmers, Keryn
AU - Clinch, Greg
AU - Godfrey, Jayne M.
PY - 2011/8/1
Y1 - 2011/8/1
N2 - We investigate whether the adoption of IFRS increases the value relevance of accounting information for firms listed on the Australian Securities Exchange. Using a longitudinal study that covers pre-IFRS and post-IFRS periods during 1990-2008, we find that earnings become more value-relevant whereas the book value of equity does not. This impact is concentrated in the subsamples of industrial firms, both large and small, and firms reporting an AGAAP-IFRS accounting reconciliation upon IFRS adoption. Consistent with an increase in the value relevance of earnings, earnings also become more persistent around IFRS adoption. Our study suggests that even for a country categorized by strong investor protection and high-quality financial reporting and enforcement, IFRS adoption affects the associations between accounting information and market value.
AB - We investigate whether the adoption of IFRS increases the value relevance of accounting information for firms listed on the Australian Securities Exchange. Using a longitudinal study that covers pre-IFRS and post-IFRS periods during 1990-2008, we find that earnings become more value-relevant whereas the book value of equity does not. This impact is concentrated in the subsamples of industrial firms, both large and small, and firms reporting an AGAAP-IFRS accounting reconciliation upon IFRS adoption. Consistent with an increase in the value relevance of earnings, earnings also become more persistent around IFRS adoption. Our study suggests that even for a country categorized by strong investor protection and high-quality financial reporting and enforcement, IFRS adoption affects the associations between accounting information and market value.
KW - Accounting information
KW - IFRS
KW - value relevance
UR - http://www.scopus.com/inward/record.url?scp=80051984137&partnerID=8YFLogxK
U2 - 10.1177/0312896211404571
DO - 10.1177/0312896211404571
M3 - Article
AN - SCOPUS:80051984137
VL - 36
SP - 151
EP - 173
JO - Australian Journal of Management
JF - Australian Journal of Management
SN - 0312-8962
IS - 2
ER -