The Value Relevance of Intangible Assets and the Mandatory Adoption of IFRS

2009 ◽  
Author(s):  
Serena Morricone ◽  
Raffaele Oriani ◽  
Maurizio Sobrero
Keyword(s):  
Intangible Assets ◽  
Value Relevance ◽  
Mandatory Adoption

scholarly journals The Value of Discretion in Africa: Evidence from Acquired Intangible Assets Under IFRS 3

2020 ◽  
Vol 55 (02) ◽  
pp. 2050008
Author(s):  
Abongeh A. Tunyi ◽  
Dimu Ehalaiye ◽  
Ernest Gyapong ◽  
Collins G. Ntim
Keyword(s):  
Financial Reporting ◽  
Intangible Assets ◽  
Value Relevance ◽  
Managerial Discretion ◽  
African Countries ◽  
Target Firm ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Main Hypothesis

This paper examines the value of managerial discretion in financial reporting by exploring the value relevance of intangible assets acquired in business combinations (AIA) before and after the 2008 International Financial Reporting Standard (IFRS) 3 amendment. The 2008 IFRS 3 amendment gave managers the discretion to recognize previously unrecognized intangibles in the target firm, hence, we posit that if managerial discretion improves the quality of financial reporting, we should observe an increase in the value relevance of AIA after the amendment. Our empirical analysis is based on a dataset of 603 mergers announced between 2004 and 2016, across seven African countries. Consistent with our main hypothesis, we find that the value relevance of AIA, predominantly acquired goodwill (AGW), increased after the amendment, suggesting that managerial discretion improves the quality of financial information. Our results further show that the value of discretion is moderated by the underlying institutional quality, with the value relevance of AIA being greater in high-quality institutional contexts. Our findings are robust to alternative measures of AIA, alternative models for testing value relevance, and various controls for endogeneity. Overall, our findings have important implications for accounting standard-setters, governments, investors, and practitioners.

Intangible assets and value relevance: Evidence from the Portuguese stock exchange

2010 ◽  
Vol 42 (4) ◽  
pp. 241-252 ◽  
Author(s):  
Lídia Oliveira ◽  
Lúcia Lima Rodrigues ◽  
Russell Craig
Keyword(s):  
Intangible Assets ◽  
Value Relevance ◽  
Stock Exchange

The Impact of Mandatory IFRS Adoption on Accounting Quality: Evidence from Australia

2012 ◽  
Vol 11 (1) ◽  
pp. 119-146 ◽  
Author(s):  
Yi Lin Chua ◽  
Chee Seng Cheong ◽  
Graeme Gould
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Accounting Quality ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Financial Firms ◽  
Wide Range ◽  
Mandatory Adoption ◽  
The Impact

ABSTRACT Following the mandatory implementation of International Financial Reporting Standards (IFRS) in Australia as of January 1, 2005, this study examines its impact on accounting quality by focusing on three perspectives: (1) earnings management, (2) timely loss recognition, and (3) value relevance. Using four years of adoption experience since the mandate was first made effective in Australia for a wide range of accounting-based metrics and market-based information, we find that the mandatory adoption of IFRS has resulted in better accounting quality than previously under Australian generally accepted accounting principles (GAAP). In particular, the findings indicate that the pervasiveness of earnings management by way of smoothing has reduced, while the timeliness of loss recognition has improved post-adoption. Additionally, the value relevance of financial statement information has improved, especially for non-financial firms. This is despite the fact that there is evidence to suggest that financial firms are engaged in managing earnings toward a small positive target after the mandatory adoption of IFRS in Australia.

The Effect of Mandatory Adoption of IFRS on Earnings Quality: Evidence from the European Union

2012 ◽  
Vol 11 (2) ◽  
pp. 1-25 ◽  
Author(s):  
Daniel Zeghal ◽  
Sonda M. Chtourou ◽  
Yosra M. Fourati
Keyword(s):  
European Union ◽  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Earnings Quality ◽  
The European Union ◽  
Accounting Quality ◽  
Financial Reporting Standards ◽  
Accounting Numbers ◽  
Mandatory Adoption

ABSTRACT This paper addresses the question whether the mandatory adoption of International Financial Reporting Standards (IFRS) is associated with higher accounting quality. More specifically, we investigate whether the application of IFRS in 15 European Union (EU) countries is associated with less earnings management and higher timeliness, conditional conservatism, and value relevance of accounting numbers. Our results suggest that there has been some improvement in accounting quality between the pre- and post-IFRS adoption periods. In particular, we find that firms exhibit an increase in the accounting-based attributes, but a decrease in the market-based after the adoption of IFRS in 2005. Interestingly, the findings are more pronounced for the firms in countries where the distance between the pre-existing national GAAP and IFRS is important. Furthermore, we are unable to identify any change within firms that have converged their local GAAP toward IFRS before the mandatory transition.

scholarly journals The Different Changes Of Value Relevance Of Earnings Between SOEs And NSOEs After Adoption Of IFRS: Evidence From China

2016 ◽  
Vol 32 (3) ◽  
pp. 765-776
Author(s):  
Wanli Li ◽  
Hong Guo
Keyword(s):  
Empirical Evidence ◽  
Value Relevance ◽  
Accounting Standards ◽  
The State ◽  
Accounting Standard ◽  
Accounting Earnings ◽  
Financial Report ◽  
Empirical Results ◽  
Mandatory Adoption

This article studies changes of value relevance of earnings after mandatory adoption of new CAS (the Chinese Accounting Standards) which is substantially convergent with IFRS (the International Financial Report Standards) in China’s listed enterprises. We extend the previous research by examining the different impact on value relevance of earnings between SOEs (the State-Owned Enterprises) and NSOEs (the Non-State-Owned Enterprises) after adoption of new CAS, which is based on the samples consisting of 836 companies listed on A-shares market of China. The empirical results show that the value-relevance of accounting earnings significantly increased after 2007, and represent that value relevance of earnings increased significantly in SOEs while there are no significant changes in NSOEs after adoption of the new CAS. Our research has implications for China’s Accounting Standard setters who desire to reach expected consequences of convergence with IFRS, and provide empirical evidence for adoption of IFRS in different countries which have both SOEs and NSOEs.

scholarly journals Empirical Evidence on the Value Relevance of Brand Values across Countries

2018 ◽  
Vol 11 (2) ◽  
pp. 197
Author(s):  
Grazia Dicuonzo ◽  
Andrea Perrone ◽  
Vittorio Dell'Atti
Keyword(s):  
Stock Prices ◽  
Intangible Assets ◽  
Value Relevance ◽  
Empirical Studies ◽  
Balance Sheet ◽  
Business Success ◽  
Accounting Data ◽  
Related Information ◽  
Consulting Firms ◽  
Brand Values

Stock prices reflect firms-related information differently depending on the environmental and institutional context. However, previous empirical studies test mainly accounting data. Since intangible assets became a crucial element for business success and brands are considered critical for value creation, correlated disclosure is proven to be value relevant for investors. The majority of accounting standards do not allow to recognize internally generated intangible assets in the balance sheet and therefore more and more practitioners, both investors and analysts, use brand values provided by third independent parties, such as consulting firms. The purpose of this paper is to investigate whether and how brand-related information differs across countries testing the value relevance of brand values published in Brand Finance’s Reports. This study aims to open a new stream of literature regarding the value relevance of non-accounting information across countries.

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