Author
Listed:
- Kevin C. W. Chen
- Feng Tang
Abstract
International Financial Reporting Standards (IFRS) allow firms to record adjustments (gains or losses) from the revaluation of investment properties in their income statements. After Hong Kong adopted IFRS in 2005, property companies were required to move their revaluation gains and losses (RGL) from equity to income. We find RGL to be a significant determinant of executive compensation in these firms after 2005, but not before. We further find evidence that the RGL†compensation association is driven by firms with relative weak corporate governance structure, such as firms in which the controlling shareholders own a relatively small percentage of shares, firms in which the controlling shareholders have control rights that exceed ownership rights, and firms that are no longer run by their founders.Les normes internationales d'information financière (IFRS) permettent aux sociétés de comptabiliser dans leurs états des résultats les ajustements (à la hausse ou à la baisse) entraînés par la réévaluation des immeubles de placement. Après l'adoption des IFRS par Hong Kong, en 2005, les sociétés de placement immobilier ont dû transférer leurs gains ou leurs pertes résultant de la réévaluation (RGL) des capitaux propres au résultat. Les auteurs constatent que les RGL sont un déterminant important de la rémunération des cadres dans ces sociétés après 2005, ce qui n'est pas le cas antérieurement. Ils relèvent en outre des données démontrant que le lien entre les RGL et la rémunération est caractéristique des sociétés dont la structure de gouvernance d'entreprise est relativement inefficace, par exemple celles dans lesquelles les actionnaires détenant le contrôle possèdent un pourcentage relativement peu élevé des actions, celles dans lesquelles les actionnaires détenant le contrôle jouissent en cette matière de pouvoirs qui dépassent leurs droits de propriété, et celles qui ne sont plus dirigées par leurs fondateurs.
Suggested Citation
Kevin C. W. Chen & Feng Tang, 2017.
"Post†IFRS Revaluation Adjustments and Executive Compensation,"
Contemporary Accounting Research, John Wiley & Sons, vol. 34(2), pages 1210-1231, June.
Handle:
RePEc:wly:coacre:v:34:y:2017:i:2:p:1210-1231
DOI: 10.1111/1911-3846.12285
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Citations
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Cited by:
- DeFond, Mark & Hu, Jinshuai & Hung, Mingyi & Li, Siqi, 2020.
"The effect of fair value accounting on the performance evaluation role of earnings,"
Journal of Accounting and Economics, Elsevier, vol. 70(2).
- Lam, Kevin C.K. & Sami, Heibatollah & Yao, Jun & Yao, Yiwei, 2023.
"Mandatory IFRS adoption and earnings management: The role of culture,"
Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 50(C).
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