IDEAS home Printed from https://ideas.repec.org/a/ibn/masjnl/v12y2018i11p279.html
   My bibliography  Save this article

Accounting Measurement Revolution and Market Value

Author

Listed:
  • Mohammad Aladwan

Abstract

The study is aims to examine whether the adoption of accounting measurement of AIS/IFRS standards has resulted in more relevant financial information for decision making or not. This study examines the use of fair value measurement on value of financial instruments to capture if there is any effect on the market value of financial companies. Ohlson (1995) framework has been employed to investigate this relationship. The Jordanian financial sector was the sample for the study during the years from 2012 to 2016. Our study findings, based on the results of correlation and multiple regression analysis showed that, market value of Jordanian financial companies is significantly positively related to financial instruments measured by fair values. The final result assured that; the new accounting measurements methods such as fair values are value relevant for Jordanian financial companiesduring all period of the study.

Suggested Citation

  • Mohammad Aladwan, 2018. "Accounting Measurement Revolution and Market Value," Modern Applied Science, Canadian Center of Science and Education, vol. 12(11), pages 279-279, November.
    • Handle: RePEc:ibn:masjnl:v:12:y:2018:i:11:p:279
    as

    Download full text from publisher

    File URL: https://ccsenet.org/journal/index.php/mas/article/download/0/0/37279/37609
    Download Restriction: no
    File URL: https://ccsenet.org/journal/index.php/mas/article/view/0/37279
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joshua Ronen, 2008. "To Fair Value or Not to Fair Value: A Broader Perspective," Abacus, Accounting Foundation, University of Sydney, vol. 44(2), pages 181-208, June.
    2. Mary E. Barth & Wayne R. Landsman & Mark H. Lang, 2008. "International Accounting Standards and Accounting Quality," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 467-498, June.
    3. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    4. Sophocles Vogiazas & Constantinos Alexiou, 2015. "Banking performance and the business cycle: empirical evidence from Greece," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 17(4), pages 345-359.
    5. Xiaofei Song, 2015. "Value Relevance of Fair Values—Empirical Evidence of the Impact of Market Volatility," Accounting Perspectives, John Wiley & Sons, vol. 14(2), pages 91-116, June.
    6. Christian Laux & Christian Leuz, 2010. "Did Fair-Value Accounting Contribute to the Financial Crisis?," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 93-118, Winter.
    7. Stephen Penman, 2007. "Financial reporting quality: is fair value a plus or a minus?," Accounting and Business Research, Taylor & Francis Journals, vol. 37(S1), pages 33-44.
    8. Barth, Mary E. & Landsman, Wayne R. & Wahlen, James M., 1995. "Fair value accounting: Effects on banks' earnings volatility, regulatory capital, and value of contractual cash flows," Journal of Banking & Finance, Elsevier, vol. 19(3-4), pages 577-605, June.
    9. Daniel R. Brickner & Charles A. Brown & Mark Myring, 2007. "Using fundamental analysis of financial information to explain unexpected market behaviour," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 9(4), pages 366-380.
    10. Jo Danbolt & William Rees, 2008. "An Experiment in Fair Value Accounting: UK Investment Vehicles," European Accounting Review, Taylor & Francis Journals, vol. 17(2), pages 271-303.
    11. Prem Lal Joshi & Liew Chui Ling & Lim Wei Yin & Ashutosh Deshmukh, 2016. "Disclosure choices, corporate characteristics and compliance with IFRS Practice Statement Management Commentary: an empirical study of Malaysian listed companies," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 18(6), pages 679-703.
    12. Sandra Cohen & Sotiris Karatzimas & George Venieris, 2015. "The informative role of accounting standards in privatising state-owned property: comparing Greek Governmental Accounting Standards and IPSAS," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 17(1), pages 51-62.
    13. Gunther Gebhardt & Rolf Reichardt & Carsten Wittenbrink, 2004. "Accounting for financial instruments in the banking industry: conclusions from a simulation model," European Accounting Review, Taylor & Francis Journals, vol. 13(2), pages 341-371.
    14. Muhammad Azam & Syed Ali Raza, 2018. "Financial sector development and income inequality in ASEAN-5 countries: does financial Kuznets curve exists?," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 20(1), pages 88-114.
    15. Ball, R & Brown, P, 1968. "Empirical Evaluation Of Accounting Income Numbers," Journal of Accounting Research, Wiley Blackwell, vol. 6(2), pages 159-178.
    16. Francis, J & Schipper, K, 1999. "Have financial statements lost their relevance?," Journal of Accounting Research, Wiley Blackwell, vol. 37(2), pages 319-352.
    17. Kanagaretnam, Kiridaran & Mathieu, Robert & Shehata, Mohamed, 2009. "Usefulness of comprehensive income reporting in Canada," Journal of Accounting and Public Policy, Elsevier, vol. 28(4), pages 349-365, July.
    18. Jamal Barzegari Khanagha, 2011. "Value Relevance of Accounting Information in the United Arab Emirates," International Journal of Economics and Financial Issues, Econjournals, vol. 1(2), pages 33-45, June.
    19. Oguzhan Ozcelebi, 2014. "Possible effects of the stock market movements on interest rates, output and inflation: empirical evidence from the emerging markets of Europe," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 16(2), pages 179-201.
    20. Hui-Boon Tan & Mei-Foong Wong & Elgilani Eltahir Elshareif, 2015. "The impact of volatility shifts on market efficiency: the case of four emerging Southeast Asian stock markets," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 17(2), pages 203-216.
    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. Fahim Javed & Nargis Akhtar & Muhammad Fayyaz Sheikh & Muhammad Shahid Rasheed, 2023. "Social Anxiety, Self-efficacy and Academic Achievement in Matric Students of Lahore Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(1), pages 28-37, March.
    2. Shan, Yuan George, 2015. "Value relevance, earnings management and corporate governance in China," Emerging Markets Review, Elsevier, vol. 23(C), pages 186-207.
    3. Tahat, Yasean A. & Alhadab, Mohammad, 2017. "Have accounting numbers lost their value relevance during the recent financial credit crisis?," The Quarterly Review of Economics and Finance, Elsevier, vol. 66(C), pages 182-191.
    4. A. Rashad Abdel‐Khalik, 2010. "Fair Value Accounting and Stewardship," Accounting Perspectives, John Wiley & Sons, vol. 9(4), pages 253-269, December.
    5. Kalin S. Kolev, 2019. "Do Investors Perceive Marking-to-Model as Marking-to-Myth? Early Evidence from FAS 157 Disclosure," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-47, June.
    6. Alali, Fatima A. & Foote, Paul Sheldon, 2012. "The Value Relevance of International Financial Reporting Standards: Empirical Evidence in an Emerging Market," The International Journal of Accounting, Elsevier, vol. 47(1), pages 85-108.
    7. Beisland, Leif Atle, 2014. "Equity valuation in practice: The influence of net financial expenses," Accounting forum, Elsevier, vol. 38(2), pages 122-131.
    8. Veith, Stefan & Werner, Jörg R., 2014. "Comparative Value Relevance Studies: Country Differences Versus Specification Effects," The International Journal of Accounting, Elsevier, vol. 49(3), pages 301-330.
    9. Lin Liao & Helen Kang & Richard D. Morris, 2021. "The value relevance of fair value and historical cost measurements during the financial crisis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 2069-2107, April.
    10. Couch, Robert & Thibodeau, Nicole & Wu, Wei, 2017. "Are fair value options created equal? A study of SFAS 159 and earnings volatility," Advances in accounting, Elsevier, vol. 38(C), pages 15-29.
    11. Argilés bosch, Josep M.a & Aliberch, Anna Sabata & Blandón, Josep García, 2012. "A Comparative Study of Difficulties in Accounting Preparation and Judgement in Agriculture Using Fair Value and Historical Cost for Biological Assets Valuation," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 15(1), pages 109-142.
    12. Lorena Mitrione & George Tanewski & Jacqueline Birt, 2014. "The relevance to firm valuation of research and development expenditure in the Australian health-care industry," Australian Journal of Management, Australian School of Business, vol. 39(3), pages 425-452, August.
    13. Sin-Hui Yen & Yun-Ting Lai & Hui-Ling Chen, 2016. "Influence of Fair Value on the Qualitative Characteristics and Decision Usefulness of Accounting Information," Accounting and Finance Research, Sciedu Press, vol. 5(4), pages 179-179, November.
    14. Goncharov, Igor & Werner, Joerg R. & Zimmermann, Jochen, 2009. "Legislative demands and economic realities: Company and group accounts compared," The International Journal of Accounting, Elsevier, vol. 44(4), pages 334-362, December.
    15. Tae Choi & Jinchul Jung, 2008. "Ethical Commitment, Financial Performance, and Valuation: An Empirical Investigation of Korean Companies," Journal of Business Ethics, Springer, vol. 81(2), pages 447-463, August.
    16. Piotr Bolibok, 2014. "The impact of IFRS on the value relevance of accounting data of banks listed on the Warsaw Stock Exchange," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 3(1), pages 33-43.
    17. Elbakry, Ashraf E. & Nwachukwu, Jacinta C. & Abdou, Hussein A. & Elshandidy, Tamer, 2017. "Comparative evidence on the value relevance of IFRS-based accounting information in Germany and the UK," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 28(C), pages 10-30.
    18. 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.
    19. Iain Clacher & Alan Duboisée Ricquebourg & Allan Hodgson, 2013. "The Value Relevance of Direct Cash Flows under International Financial Reporting Standards," Abacus, Accounting Foundation, University of Sydney, vol. 49(3), pages 367-395, September.
    20. Taibat A. Atoyebi & Yinka M. Salaudeen & Jerry Y. A. Onyilokwu, 2018. "International Financial Reporting Standards Adoption and Value Relevance of Financial Information of Quoted Healthcare Firms in Nigeria," Applied Economics and Finance, Redfame publishing, vol. 5(4), pages 174-184, July.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    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:ibn:masjnl:v:12:y:2018:i:11:p:279. 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: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.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.