Value Relevance of Book Value & Earnings Under the Local GAAP and IFRS: Evidence from Turkey
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.
Volume (Year): 12 (2012)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://iibf.ege.edu.tr/ENG/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
When requesting a correction, please mention this item's handle: RePEc:ege:journl:v:12:y:2012:i:3:p:301-310. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Baris Gök)
If references are entirely missing, you can add them using this form.