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Pertinence des mesures non-GAAP pour les marchés boursiers : le cas des firmes du CAC 40

Author

Listed:
  • Denis Cormier

    (ESG UQAM, Montreal, Canada)

  • Samira Demaria

    (University of Nice Sophia Antipolis, France
    GREDEG CNRS)

Abstract

This study focuses on the use of non-GAAP by French companies (CAC 40) and its impact on the stock market controlling for corporate governance. Our main results are as follows. First, we find a complementary effect between residual earnings and non- GAAP for market valuation. Second, in the presence of good governance, the impact of the publication of non-GAAP (number) on the valuation of residual results decreases. This could mean an abundance of non-GAAP reduces its relevance. Corporate governance would substitute to non-GAAP measures (number) for residual earnings valuation. Third governance itself has a positive impact on residual earnings valuation. However, unlike the number of non-GAAP published, the level of detail (number of pages) is not affected by corporate governance in residual earnings valuation. This could be explained by the fact that the AMF advocates for a reconciliation of non-GAAP and IFRS financial data. Fourth, our results suggest that after a certain threshold, non-GAAP (number or pages) create asymmetry in equity markets.

Suggested Citation

  • Denis Cormier & Samira Demaria, 2014. "Pertinence des mesures non-GAAP pour les marchés boursiers : le cas des firmes du CAC 40," GREDEG Working Papers 2014-22, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  • Handle: RePEc:gre:wpaper:2014-22
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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2014-22.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
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    2. repec:eee:jiaata:v:21:y:2012:i:2:p:79-105 is not listed on IDEAS
    3. Heflin, Frank & Hsu, Charles, 2008. "The impact of the SEC's regulation of non-GAAP disclosures," Journal of Accounting and Economics, Elsevier, vol. 46(2-3), pages 349-365, December.
    4. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "The effect of international institutional factors on properties of accounting earnings," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 1-51, February.
    5. Gregory Heem, 2007. "La communication sur les indicateurs de performance non définis en IFRS," Post-Print hal-00423758, HAL.
    6. Ross Jennings & Ana Marques, 2011. "The Joint Effects of Corporate Governance and Regulation on the Disclosure of Manager-Adjusted Non-GAAP Earnings in the US," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 38(3-4), pages 364-394, April.
    7. repec:eee:jocaae:v:9:y:2013:i:1:p:100-121 is not listed on IDEAS
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    More about this item

    Keywords

    Corporate governance; Non-GAAP; Residual earnings; Stock market valuation;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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