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Value Relevance of Book Value & Earnings Under the Local GAAP and IFRS: Evidence from Turkey


  • Gulhan SUADIYE

    () (Mustafa Kemal Universitesi, Iktisadi ve Idari Bilimler Fakultesi, Isletme Bolumu)


This study examines empirically the impact of International Financial Reporting Standards (IFRS) on the value relevance of accounting information in Turkey. Turkish listed firms on the Istanbul Stock Exchange (ISE) are required to adopt IFRS in the preparation and presentation of their financial statements since 2005. Using the equity valuation model as suggested by Ohlson (1995), firstly, the value relevance of earnings and book values of equity produced under Turkish Local Standards (during 2000-2002) and under IFRS (during 2005-2009) is analyzed. And then, these two periods are compared to investigate whether the mandatory adoption of IFRS has an impact on value relevance of accounting information. The analysis results show that earnings and book value are, jointly and individually, positively and significantly related to stock price under the two different reporting regimes. Additionally, the results provide that book value of equity is more value relevant than earnings. When two different reporting standards are compared, it is found that the adoption of IFRS increased the value relevance of accounting information for Turkish listed firms. This study contributes to the existing literature on the value relevance of accounting information and to the debate over the mandatory adoption of IFRS.

Suggested Citation

  • Gulhan SUADIYE, 2012. "Value Relevance of Book Value & Earnings Under the Local GAAP and IFRS: Evidence from Turkey," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 12(3), pages 301-310.
  • Handle: RePEc:ege:journl:v:12:y:2012:i:3:p:301-310

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    References listed on IDEAS

    1. Kirkulak, Berna & Balsari, Cagnur Kaytmaz, 2009. "Value Relevance of Inflation-adjusted Equity and Income," The International Journal of Accounting, Elsevier, vol. 44(4), pages 363-377, December.
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    Cited by:

    1. Carmen-Alexandra Baltariu Ph. D Student, 2015. "Value Relevance And The Adoption Of The Ias/ Ifrs Framework – A Literature Review," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(24), pages 13-20, APRIL.
    2. repec:rfa:afajnl:v:4:y:2018:i:1:p:122-145 is not listed on IDEAS
    3. Shah, Syed Zulfiqar Ali & Liang, Shuang & Akbar, Saeed, 2013. "International Financial Reporting Standards and the value relevance of R&D expenditures: Pre and post IFRS analysis," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 158-169.

    More about this item


    IFRS; value relevance; local GAAP; capital markets;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting


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