A note on the information content of parent company versus consolidated earnings in Finland
Little empirical research has been focused on analysing the information content of consolidated versus parent-only earnings numbers. In most European countries corporate annual reports include parent company statements, whereas in the USA only consolidated financial statements are available to shareholders. Using accounting and market data from thirty-five Finnish listed firms, we examine the information content of consolidated versus parent-only earnings, after controlling for each other. The results show that consolidated earnings are a significant incremental explanatory variable for stock returns, while parent-only earnings are not. The findings suggest that consolidation improves the information content of earnings, and the requirement to disclose parent-only earnings should be based on arguments other than their value-relevance to shareholders.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 7 (1998)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/REAR20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/REAR20|
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.:
- Brown, Stephen J. & Warner, Jerold B., 1980. "Measuring security price performance," Journal of Financial Economics, Elsevier, vol. 8(3), pages 205-258, September.
- Alex Kane & Young Ki Lee & Alan J. Marcus, 1983.
"Earnings and Dividend Announcements is there a Corroboration Effect?,"
NBER Working Papers
1248, National Bureau of Economic Research, Inc.
- Kane, Alex & Lee, Young Ki & Marcus, Alan, 1984. " Earnings and Dividend Announcements: Is There a Corroboration Effect?," Journal of Finance, American Finance Association, vol. 39(4), pages 1091-1099, September.
- Beaver, William H. & Griffin, Paul A. & Landsman, Wayne R., 1982. "The incremental information content of replacement cost earnings," Journal of Accounting and Economics, Elsevier, vol. 4(1), pages 15-39, July.
When requesting a correction, please mention this item's handle: RePEc:taf:euract:v:7:y:1998:i:1:p:31-40. 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: (Michael McNulty)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.