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IAS 41 and stock price informativeness

Author

Listed:
  • Audrey Wen-hsin Hsu
  • Sophia Liu
  • Heibatollah Sami
  • TingHong Wan

Abstract

We investigate whether the adoption of International Accounting Standard 41: Agriculture influences firm-specific information flows capitalized into stock prices and thus affects stock price informativeness. Using a sample of IAS 41 adopters from countries that mandates IFRS in 2005 and the control samples of non-IAS 41 adopters, we find that price informativeness for IAS 41 adopters increases following IAS 41 adoption. We also find that the effect of IAS 41 adoption is similar between firms that transforms bearer plants, which derive value in use of assets and other biological assets. Overall, our results are consistent with the notion that the increased transparency from IAS 41 adoption broadly facilitates firm-specific information flows entering into stock market and thereby reduces synchronicity, making stock price more informative.

Suggested Citation

  • Audrey Wen-hsin Hsu & Sophia Liu & Heibatollah Sami & TingHong Wan, 2019. "IAS 41 and stock price informativeness," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 26(1-2), pages 64-89, January.
    • Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:64-89
    DOI: 10.1080/16081625.2019.1545928
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