The Value Relevance of Financial Statements in Private Equity Markets

This chapter aims to present some limitations of financial reporting on innovation with an impact on the investor's decision-making process. In order to do so, the authors show how accounting recognizes and measures innovation factors: the intangibles. Based on the literature, the authors discuss how the value relevance of financial reporting on innovation is conditioned by non-financial factors. The impacts of the adoption of IFRSs, the effect of the industry sectors and the effect of the individual characteristics of the different countries on the value relevance of the intangible assets are analyzed. The literature suggests a decrease in the value relevance of financial statements due to the manner in which intangibles are recognized and measured in accounting. However, financial reporting on innovation is value relevant to the investor's decision-making and is conditioned by non-financial factors. Value relevance differs among different industry sectors, between different countries and is conditioned by the accounting systems used in the preparation of the financial information.

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The Change in Value Relevance of Consolidated Financial Statements under K-IFRS

The Academic Society of Global Business Administration ◽

10.38115/asgba.2016.13.1.337 ◽

2016 ◽

Vol 13 (1) ◽

pp. 337-362

Author(s):

Myeong-Jeon Oh

Keyword(s):

Value Relevance ◽

Financial Statements ◽

Consolidated Financial Statements

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Association between Accounting Numbers and Value of Food and Beverages Firms in Nigeria

International Journal of Economics and Finance ◽

10.5539/ijef.v7n12p245 ◽

2015 ◽

Vol 7 (12) ◽

pp. 245

Author(s):

Nyor Terzungwe ◽

Nasiru Rabiu

Keyword(s):

Value Relevance ◽

Stock Exchange ◽

Investment Decision ◽

Market Price ◽

Accounting Information ◽

Financial Statements ◽

Annual Reports ◽

Market Values ◽

Food And Beverages ◽

Accounting Numbers

<p>The degree of statistical relationship between the contents of financial statements and market price of equity is what is termed Value relevance of accounting information. It explains stock market measures using financial information variables and it is a very useful guide to investors in pricing of shares. This study examines the extent of association between accounting information variables of earnings, dividend and book value of equity and market value of listed Food and Beverages firms in Nigeria. Data were collected from the published annual reports of the sampled firms and their market values obtained from the official daily list of the Nigerian Stock Exchange (NSE) over a period of 10 years (2001-2010). Using multivariate regression as technique for data analysis, the study established that accounting information of Food & Beverages companies in Nigeria is value relevant. Accordingly, the study recommends the use of financial statements figures of Food and Beverages firms for investment decision.</p>

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Thirty years after Jensen’s prediction: Is private equity a superior form of ownership?

Oxford Review of Economic Policy ◽

10.1093/oxrep/graa004 ◽

2020 ◽

Vol 36 (2) ◽

pp. 291-313 ◽

Cited By ~ 4

Author(s):

Peter Morris ◽

Ludovic Phalippou

Keyword(s):

Private Equity ◽

Financial Statements ◽

Harvard Business Review ◽

Corporate Ownership ◽

Public And Private ◽

The Public ◽

Equity Model ◽

High Level ◽

Time And Energy ◽

Positive Results

Abstract Almost exactly 30 years ago, a famous article by Michael Jensen in the Harvard Business Review predicted that private equity would ‘eclipse’ the public corporation because it was a superior form of corporate ownership. Trends since 1989 seem to bear out Jensen’s prediction. Much time and energy has gone into studying whether the private equity model does see companies being run better for investors and society. Progress has been made and most studies find positive results. But samples are usually relatively small. And the relative complexity of private equity transactions, combined with a high level of privacy, makes it hard to find financial statements that are tractable enough for meaningful analysis. After 30 years of research, we argue that a conclusive answer to the question remains further away than might seem to be the case. In the meantime, the appropriate regulatory response involves narrowing the ‘regulatory gap’ between public and private markets.

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