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Have IFRS Contributed to an Increased Value-Relevance?: The Scandinavian Evidence
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2012 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This paper examines the value-relevance of Scandinavian earnings information and book values over the past decade in order to shed some light on whether the extensive global adoption of IFRS/IAS has contributed to an increased accounting quality in terms of economic decision-usefulness to equity investors. We address this research question using a sample of 4.310 firm-year observations for 431 exchange-listed companies at NASDAQ OMX Nordic and Oslo Stock Exchange between 2001 and 2010. The degree of value-relevance in our firm-sample is operationalized through two price regressions and one return regression and empirically tested via the statistical association between capitalized values of equity or annual changes in capitalized values of equity and the study’s three explanatory accounting variables: (i) book values, (ii) accrual-based earnings and (iii) cash-flow-based earnings. Taken as a whole, our results show significant empirical signs of an increased value-relevance in both Scandinavian earnings information and book values, allowing us to draw significant as well as contributing conclusions on the information content of financial statement information disclosed in the Scandinavian region. We believe our study adds empirical substance to practical debates over the function of financial reporting as well as resourceful material to both Scandinavian investors and to the ongoing international discussion on the harmonization of financial reporting standards.

Place, publisher, year, edition, pages
2012. , 33 p.
Keyword [en]
Accruals, Book Values, Cash Flows, Earnings, FASB, IASB, IFRS, Value-Relevance
National Category
Business Administration
URN: urn:nbn:se:uu:diva-179805OAI: diva2:546324
Subject / course
Business Studies
2012-05-25, Kyrkogårdsgatan 10, Uppsala, 17:00 (English)
Social and Behavioural Science, Law
Available from: 2012-09-04 Created: 2012-08-23 Last updated: 2012-09-04Bibliographically approved

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