The value relevance of IFRS in the European banking industry

The value relevance of IFRS in the European banking industry The main purpose of the paper is to investigate the market valuation of accounting information in the European banking industry before and after the adoption of IFRS, the latest version of International Accounting Standards. In a value relevance framework, we apply panel methods to a multiplicative interaction model, in which the partial effects of earnings and book value on share prices are conditional on the adoption of IFRS. According to our evidence, the IFRS introduction enhanced the information content of both earnings and book value for more transparent banks. By contrast, less transparent entities did not experience significant increase in the value relevance of book value. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

The value relevance of IFRS in the European banking industry

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Publisher
Springer US
Copyright
Copyright © 2010 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/s11156-010-0184-1
Publisher site
See Article on Publisher Site

Abstract

The main purpose of the paper is to investigate the market valuation of accounting information in the European banking industry before and after the adoption of IFRS, the latest version of International Accounting Standards. In a value relevance framework, we apply panel methods to a multiplicative interaction model, in which the partial effects of earnings and book value on share prices are conditional on the adoption of IFRS. According to our evidence, the IFRS introduction enhanced the information content of both earnings and book value for more transparent banks. By contrast, less transparent entities did not experience significant increase in the value relevance of book value.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Jun 19, 2010

References

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