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The Value and Credit Relevance of IFRS versus JGAAP Accounting Information

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  • Kim, Jonghoon
  • 金, 鐘勲
  • Koga, Yuya

Abstract

This paper examines which accounting information -one is accounting information based on Japanese GAAP (JGAAP) and the other is those based on IFRS- better explains total market capitalizations of firms' common stock and credit ratings issued by credit-rating agencies. Our results are as follows. First, both the value and credit rating relevance of IFRS-based net income measures are significantly lower than those based on JGAAP. Second, IFRS-based net income measures incrementally lower the credit rating relevance of accounting information. These results suggest that both the value and credit rating relevance of net income information of Japanese firms could become impaired by the adoption of IFRS.

Suggested Citation

  • Kim, Jonghoon & 金, 鐘勲 & Koga, Yuya, 2020. "The Value and Credit Relevance of IFRS versus JGAAP Accounting Information," Hitotsubashi Journal of commerce and management, Hitotsubashi University, vol. 53(1), pages 31-48, February.
    • Handle: RePEc:hit:hitjcm:v:53:y:2020:i:1:p:31-48
    DOI: 10.15057/30974
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    References listed on IDEAS

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