Change in value relevance of quarterly foreign sales data of U.S. multinational corporations after adopting SFAS 131

Change in value relevance of quarterly foreign sales data of U.S. multinational corporations... This paper investigates the change in value relevance of quarterly foreign sales data of U.S.-based multinational enterprises after adopting Statement of Financial Accounting Standards No. 131 (SFAS 131). First, I examine whether the interim foreign sales data of all sample firms are valued at a higher rate by equity investors after the firms adopt SFAS 131. My empirical findings indicate that for all sample firms the value relevance of quarterly foreign sales data increases after the firms adopt SFAS 131. I then examine whether the valuation consequence of firms that change their geographic segment definition after they adopt SFAS 131—segment change firms—changes after those firms adopt SFAS 131. Based on the empirical results, I conclude that quarterly foreign sales data of segment change firms are priced at a relatively higher rate after SFAS 131 is adopted. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Change in value relevance of quarterly foreign sales data of U.S. multinational corporations after adopting SFAS 131

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Publisher
Springer US
Copyright
Copyright © 2007 by Springer Science+Business Media, LLC
Subject
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-007-0040-0
Publisher site
See Article on Publisher Site

Abstract

This paper investigates the change in value relevance of quarterly foreign sales data of U.S.-based multinational enterprises after adopting Statement of Financial Accounting Standards No. 131 (SFAS 131). First, I examine whether the interim foreign sales data of all sample firms are valued at a higher rate by equity investors after the firms adopt SFAS 131. My empirical findings indicate that for all sample firms the value relevance of quarterly foreign sales data increases after the firms adopt SFAS 131. I then examine whether the valuation consequence of firms that change their geographic segment definition after they adopt SFAS 131—segment change firms—changes after those firms adopt SFAS 131. Based on the empirical results, I conclude that quarterly foreign sales data of segment change firms are priced at a relatively higher rate after SFAS 131 is adopted.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Oct 23, 2007

References

  • The time-series properties of annual earnings
    Albrecht, W; Lookabill, L; McKeown, J
  • Event study methods and evidence on their performance
    Armitage, S

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