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Has financial statement information become less relevant? Longitudinal evidence from Denmark

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  • Thinggaard, Frank
  • Damkier, Jesper

Abstract

Summary Is financial statement information, such as earnings, assets and the book value of equity, still useful to investors in the "new economy age", or should serious efforts be made by e.g. managers and researchers to improve the current financial reporting model or develop alternative reporting forms? This study investigates whether financial statement information in Denmark has become less value-relevant to investors over time. The study provides evidence from an accounting system which is based on both EU accounting directives and an "economic-substance-over-legal-form" philosophy throughout the investigated period. Overall, our results do not indicate that the value-relevance of accounting information has decreased over the investigated period (1983-2001), which is otherwise implied by some critics of "traditional" financial reporting. Rather, the results indicate that the value-relevance of accounting information is unchanged over the period.

Suggested Citation

  • Thinggaard, Frank & Damkier, Jesper, 2008. "Has financial statement information become less relevant? Longitudinal evidence from Denmark," Scandinavian Journal of Management, Elsevier, vol. 24(4), pages 375-387, December.
    • Handle: RePEc:eee:scaman:v:24:y:2008:i:4:p:375-387
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    Citations

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    Cited by:

    1. Carmen- Alexandra BALTARIU, 2015. "The Current State Of Knowledge In The Value Relevance Research Field," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 7, pages 13-20, April.
    2. Li, Yuanyuan & Roudaki, Jamal & Gan, Christopher, 2013. "The Usefulness Of Segment Reporting In Hong Kong Listed Firms: An Empirical Assessment Of Ifrs No. 8," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 9(1-2), January.
    3. 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.
    4. Dahmash, Firas N. & Durand, Robert B. & Watson, John, 2009. "The value relevance and reliability of reported goodwill and identifiable intangible assets," The British Accounting Review, Elsevier, vol. 41(2), pages 120-137.
    5. Beisland, Leif Atle & Hamberg, Mattias, 2013. "Earnings sustainability, economic conditions and the value relevance of accounting information," Scandinavian Journal of Management, Elsevier, vol. 29(3), pages 314-324.
    6. Jasim Al-Ajmi, 2009. "Investors' use of corporate reports in Bahrain," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(3), pages 266-289, March.

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