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The impact of IFRS adoption on the value relevance of accounting information in Saudi Arabia

The impact of IFRS adoption on the value relevance of accounting information in Saudi Arabia We examined the joint and relative value relevance of book value of equity (BVE) and earnings before (2015–2016), after (2017–2018) and during the comparative year (2016) of mandatory adoption of International Financial Reporting Standards (IFRS) in Saudi Arabia. Results show that the accounting information is jointly value relevant (R2), with no significant change between accounting information prepared under Saudi GAAP and IFRS. However, we found a positive change in the relative value relevance of the BVE after IFRS implementation, mainly related to the introduction of fair value measurement. Differences in value relevance were found across variances in company characteristics. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

The impact of IFRS adoption on the value relevance of accounting information in Saudi Arabia

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Publisher
Wiley
Copyright
Accounting and Finance © 2022 AFAANZ
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.12902
Publisher site
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Abstract

We examined the joint and relative value relevance of book value of equity (BVE) and earnings before (2015–2016), after (2017–2018) and during the comparative year (2016) of mandatory adoption of International Financial Reporting Standards (IFRS) in Saudi Arabia. Results show that the accounting information is jointly value relevant (R2), with no significant change between accounting information prepared under Saudi GAAP and IFRS. However, we found a positive change in the relative value relevance of the BVE after IFRS implementation, mainly related to the introduction of fair value measurement. Differences in value relevance were found across variances in company characteristics.

Journal

Accounting & Finance – Wiley

Published: Jun 1, 2022

Keywords: Value relevance; IFRS implementation; Financial reporting quality; Saudi Arabia

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