The market valuation of IAS versus US-GAAP accounting measures using Form 20-F reconciliations 1 We thank Eli Amir (the referee), Anne Beatty, Dick Dietrich, Glen Hansen, David Harris, Irene Karamanou, S.P. Kothari (the editor), Jim McKeown, K. Ramesh, Judy Rayburn, Phillip Stocken, Mohan Venkatachalam (the discussant), Elizabeth Venuti, Jerold Zimmerman and participants at the 1997 Big-10 Summer Research Conference for their helpful comments and suggestions. We also thank Shawn Davis and Shouli Zhang for their excellent research assistance. 1

The market valuation of IAS versus US-GAAP accounting measures using Form 20-F reconciliations 1... We investigate the market valuation of earnings and book value amounts prepared under IAS and US-GAAP to provide evidence for the debate between the US SEC and NYSE on whether foreign firms should be allowed to list in the US using IAS. We find that the US-GAAP earnings reconciliation adjustment is value-relevant and that US-GAAP amounts are valued differently for market value and return models, but not a price-per-share model. We also find that IAS amounts are more highly associated with price-per-share than US-GAAP amounts, and that US-GAAP amounts are more highly associated with security returns than IAS amounts. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting and Economics Elsevier

The market valuation of IAS versus US-GAAP accounting measures using Form 20-F reconciliations 1 We thank Eli Amir (the referee), Anne Beatty, Dick Dietrich, Glen Hansen, David Harris, Irene Karamanou, S.P. Kothari (the editor), Jim McKeown, K. Ramesh, Judy Rayburn, Phillip Stocken, Mohan Venkatachalam (the discussant), Elizabeth Venuti, Jerold Zimmerman and participants at the 1997 Big-10 Summer Research Conference for their helpful comments and suggestions. We also thank Shawn Davis and Shouli Zhang for their excellent research assistance. 1

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Publisher
Elsevier
Copyright
Copyright © 1999 Elsevier Science B.V.
ISSN
0165-4101
DOI
10.1016/S0165-4101(99)00003-8
Publisher site
See Article on Publisher Site

Abstract

We investigate the market valuation of earnings and book value amounts prepared under IAS and US-GAAP to provide evidence for the debate between the US SEC and NYSE on whether foreign firms should be allowed to list in the US using IAS. We find that the US-GAAP earnings reconciliation adjustment is value-relevant and that US-GAAP amounts are valued differently for market value and return models, but not a price-per-share model. We also find that IAS amounts are more highly associated with price-per-share than US-GAAP amounts, and that US-GAAP amounts are more highly associated with security returns than IAS amounts.

Journal

Journal of Accounting and EconomicsElsevier

Published: Jan 1, 1999

References

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