IDEAS home Printed from https://ideas.repec.org/a/dug/actaec/y2009i1p119-128.html
   My bibliography  Save this article

The Value Relevance of IFRS: The Case of Turkey

Author

Listed:
  • Ahmet Türel

    (Istanbul University, School of Business, Turkey)

Abstract

Accounting standards that are mostly compatible with International Financial Reporting Standards (IFRS) are required for consolidated financial statements of all Turkish listed firms starting from 2005 fiscal year end. Before that, financial reporting in Turkey was closely related to tax reporting. Until 2003, all Turkish listed firms were preparing their financial statements in accordance with the local standards issued by the Capital Market Board of Turkey. In this study, I examine the relative and incremental value relevance of earnings and the book value of equity under Capital Market Board (CMB) Accounting Standards (2001-2002) and under IFRS (2005-2006) for Turkish listed firms. I compare these two periods to investigate whether the mandatory adoption of IFRS increase relevance of earnings and book value of equity which are accepted as proxies of accounting quality. I find evidence that the value relevance of earnings and book value of equity has increased significantly after adopting IFRS. In addition, I find that the incremental value relevance of earnings increased between the CMB accounting standards period and the IFRS period. However, the incremental value relevance of book value of equity degreased in the same period.

Suggested Citation

  • Ahmet Türel, 2009. "The Value Relevance of IFRS: The Case of Turkey," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 1(1), pages 119-128, September.
    • Handle: RePEc:dug:actaec:y:2009:i:1:p:119-128
    as

    Download full text from publisher

    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/81/78
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pekdemir, Recep & Turel, Aslı, 2007. "IFRS 2005 in Turkey; Can We See the Evidences on the Financial Reports of the Companies Listed?," MPRA Paper 29838, University Library of Munich, Germany.
    2. T. E. Cooke & T. Curuk, 1996. "Accounting in Turkey with reference to the particular problems of lease transactions," European Accounting Review, Taylor & Francis Journals, vol. 5(2), pages 339-359.
    3. Collins, Daniel W. & Maydew, Edward L. & Weiss, Ira S., 1997. "Changes in the value-relevance of earnings and book values over the past forty years," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 39-67, December.
    4. Gjerde, Øystein & Knivsflå, Kjell Henry & Sættem, Frode, 2008. "The Value-Relevance of Adopting IFRS: Evidence from 145 NGAAP Restatements," Discussion Papers 2008/21, Norwegian School of Economics, Department of Business and Management Science.
    5. Gjerde, Øystein & Knivsflå, Kjell & Sættem, Frode, 2008. "The value-relevance of adopting IFRS: Evidence from 145 NGAAP restatements," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 17(2), pages 92-112.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Palea, Vera, 2014. "Are IFRS value-relevant for separate financial statements? Evidence from the Italian stock market," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 23(1), pages 1-17.
    2. Maigoshi, Zaharaddeen Salisu & Latif, Rohaida Abdul & Kamardin, Hasnah, 2018. "Change in value-relevance of disclosed RPT across accounting regimes: Evidence from Malaysia," Research in International Business and Finance, Elsevier, vol. 44(C), pages 422-433.
    3. Keryn Chalmers & Greg Clinch & Jayne M Godfrey, 2011. "Changes in value relevance of accounting information upon IFRS adoption: Evidence from Australia," Australian Journal of Management, Australian School of Business, vol. 36(2), pages 151-173, August.
    4. Onali, Enrico & Ginesti, Gianluca, 2015. "Sins of Omission in Value Relevance Empirical Studies," MPRA Paper 64265, University Library of Munich, Germany.
    5. Vera Palea, 2012. "Are IFRS Value-Relevant for Separate Financial Statements? Evidence from the Italian Stock Market," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201211, University of Turin.
    6. Gjerde, Øystein & Knivsflå, Kjell & Sættem, Frode, 2011. "The value relevance of financial reporting in Norway 1965-2004," Scandinavian Journal of Management, Elsevier, vol. 27(1), pages 113-128, March.
    7. Palea Vera, 2013. "Capital Market Effects of the IFRS Adoption for Separate Financial Statements: Evidence from the Italian Stock Market," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201309, University of Turin.
    8. Nazmul Hassan, & Hasan Md. Mahmood Ul Haque, 2017. "Role of Accounting Information in Assessing Stock Prices in Bangladesh," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 7(10), pages 18-25, October.
    9. Manganaris, Panayotis & Spathis, Charalambos & Dasilas, Apostolos, 2015. "The effects of mandatory IFRS adoption and conditional conservatism on European bank values," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 24(C), pages 72-81.
    10. Nazmul Hassan, & Hasan Md. Mahmood Ul Haque, 2017. "Role of Accounting Information in Assessing Stock Prices in Bangladesh," International Journal of Business and Social Research, LAR Center Press, vol. 7(10), pages 18-25, October.
    11. Tanaka, Takanori, 2019. "Gender diversity on Japanese corporate boards," Journal of the Japanese and International Economies, Elsevier, vol. 51(C), pages 19-31.
    12. Philip Brown, 2011. "International Financial Reporting Standards: what are the benefits?," Accounting and Business Research, Taylor & Francis Journals, vol. 41(3), pages 269-285, August.
    13. Senteney, David L. & Bazaz, Mohammad S. & Senteney, Michael H., 2016. "Cross-market information transfers of ADR firms: An investigation of emerging market economies," Research in International Business and Finance, Elsevier, vol. 37(C), pages 655-677.
    14. Alain Devalle & Riccardo Magarini, 2012. "Assessing the value relevance of total comprehensive income under IFRS: an empirical evidence from European stock exchanges," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 8(1), pages 43-68.
    15. Mary E. Barth & Wayne R. Landsman & Danqing Young & Zili Zhuang, 2014. "Relevance of Differences between Net Income based on IFRS and Domestic Standards for European Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 41(3-4), pages 297-327, April.
    16. Lueg, Rainer & Punda, Pawel & Burkert, Michael, 2014. "Does transition to IFRS substantially affect key financial ratios in shareholder-oriented common law regimes? Evidence from the UK," Advances in accounting, Elsevier, vol. 30(1), pages 241-250.
    17. Jean‐Michel Sahut & Sandrine Boulerne & Frédéric Teulon, 2011. "Do IFRS provide better information about intangibles in Europe?," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 10(3), pages 267-290, August.
    18. Tudor Liviu-ALexandru, 2017. "The Analysis of the IFRS Adoption Effects on the Accounting Quality in the European Context," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 687-690, December.
    19. Hasyyati Yusrina & Mukhtaruddin Mukhtaruddin & Luk Luk Fuadah & Zunaidah Sulong, 2017. "International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 433-447.
    20. da Silva, Ricardo Luiz Menezes & Nardi, Paula Carolina Ciampaglia, 2017. "Full adoption of IFRSs in Brazil: Earnings quality and the cost of equity capital," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1057-1073.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dug:actaec:y:2009:i:1:p:119-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniela Robu (email available below). General contact details of provider: https://edirc.repec.org/data/fedanro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.