Study on value-relevance of financial assets' fair value—from the perspective of comprehensive income

2013 ◽  
Author(s):  
Zhoue He ◽  
Baoshuang Song ◽  
Weiqing Wang
Keyword(s):  
Value Relevance ◽  
Fair Value ◽  
Financial Assets ◽  
Comprehensive Income

scholarly journals Relevansi Nilai Atas Nilai Wajar Aset dan Liabilitas Dengan Mekanisme Good Corporate Governance Sebagai Variabel Pemoderasi

InFestasi ◽  
2017 ◽  
Vol 13 (1) ◽  
pp. 227
Author(s):  
Yusifa Pascayanti ◽  
Aulia Fuad Rahman ◽  
Wuryan Andayani
Keyword(s):  
Corporate Governance ◽  
Stock Returns ◽  
Stock Prices ◽  
Audit Committee ◽  
Value Relevance ◽  
Fair Value ◽  
Measurement Model ◽  
Financial Assets ◽  
Book Value ◽  
Good Corporate Governance

This study examines the relevance of fair value of assets and liabilities and mechanisms of good corporate governance as a moderating variable by using a sample banking companies listed in Indonesia Stock Exchange from 2012 to 2014 year. The sampling method using purposive sampling and analysis of research data using Eviews. Mechanism of Good Corporate Governance in the study visits of the independent board, institutional investors and the audit committee of the company. Furthermore, this research also investigates the value relevance of accounting information such as book value, earnings, the fair value of financial assets and liabilities with a view influence on stock prices and stock returns. Ohlson Model (1995) into the measurement model used in this study, and this study examines both the measurement model Ohlson is the pricing model and the model returns to see the consistency of the study. Significant results indicate that the book value, earnings, the fair value of assets and liabilities fair value has relevance value. So we can conclude all variables affect stock prices and stock returns. In addition, Good corporate governance mechanisms able to moderate over the value relevance of book value, earnings, fair value of financial assets and liabilities fair value.

Assessing value relevance of comprehensive income in European banks and other financial institutions

2013 ◽  
pp. 13-41 ◽  
Author(s):  
Alessandro Mechelli ◽  
Riccardo Cimini
Keyword(s):  
Financial Institutions ◽  
Value Relevance ◽  
Financial Statements ◽  
Financial Assets ◽  
Net Income ◽  
Consolidated Financial Statements ◽  
Comprehensive Income ◽  
European Banks ◽  
Gains And Losses

The IAS/IFRS compliant groups have been disclosing comprehensive income since 2009, when the IAS 1-revised became effective. This paper aims to investigate the value relevance of comprehensive income and its components in European banks and other financial institutions. The research has been developed by having a sample of 166 European listed groups whose data have been collected in the 2009, 2010 and 2011 (498 firm-year observations) consolidated financial statements. In contrast to previous findings, related to all the sectors, our research highlights a higher value relevance of comprehensive income in respect to net income. Moving to the single OCI components, our results suggest that gains and losses on remeasuring available-for-sale financial assets (AFSit) are value relevant in European banks and other financial institutions.

scholarly journals The Value and Risk Relevance of Fair Value: The Case of French Firms

2016 ◽  
Vol 6 (2) ◽  
pp. 15
Author(s):  
Mondher Kouki ◽  
Mosbeh Hsini ◽  
Farah Tabassi
Keyword(s):  
Value Relevance ◽  
Fair Value ◽  
Net Income ◽  
Financial Instruments ◽  
Historical Cost ◽  
Comprehensive Income ◽  
Empirical Tests ◽  
Income Measurement ◽  
Value Changes ◽  
Value Measurement

We study the performance of fair value accounting standards of financial instruments starting from the analysis of quality relevance of accounting information. In particular, we are interested in the value relevance and risk relevance of income that contains financial instruments measured or not at fair value. To do so, we compare three income levels known as accounting standard’s history. The three major levels are Full-Fair-Value income measurement (all-fair-value changes recognized in income), piecemeal-fair-value income measurement or comprehensive income (some fair-value changes recognized in income), and historical-cost income measurement or net income (no fair-value measurement existing). The empirical tests of value relevance showed that net income is not a relevant value, and Full Fair Value Income is more significant than the Comprehensive Income. The study shows also that risk relevance is more, measured by the volatility of Full Fair Value Income.

scholarly journals THE VALUE RELEVANCE OF INTERNATIONAL ACCOUNTING STANDARD IMPLEMENTATION AND AUDIT QUALITY

2015 ◽  
Vol 3 (3) ◽  
pp. 801
Author(s):  
Hanifa Zulhaimi ◽  
R. Nelly R. Nelly Nur Apandi
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Audit Quality ◽  
Value Relevance ◽  
Balance Sheet ◽  
Fair Value ◽  
International Accounting ◽  
Net Income ◽  
Comprehensive Income ◽  
Other Comprehensive Income

The implementation of international accounting standards in Indonesia has significantly affected financial reporting. It increases information relevance for the investors because a fair value comprehensively represents assets and liabilities of an entity as of the balance sheet date. However, this triggers polemics over the value relevance of International Financial Reporting Standard (IFRS). This can be seen from stock price decline. This study aims to find out the effect of net income and other comprehensive income on stock price and to observe the effect of other comprehensive income moderated by audit quality. Furthermore this study also aims to find out the effect of  the subjectivity of OCI components. Using a sample of 79 companies, the writer analyzes 2014 financial statements derived from Indonesia Stock Exchange. Based on the result, the predetermined hypotheses are unable to prove. Net income is the only variable that affects stock return. Thus it can be concluded that net income has a value relevance for the investors in making economic decisions.

scholarly journals Role of Corporate Governance in Increasing the Value Relevance of Earning and Fair Value Measurement of Non-Financial Asset in Indonesia Company

2019 ◽  
Vol 6 (1) ◽  
pp. 91
Author(s):  
Ananta Dian Pratiwi ◽  
Sutrisno Sutrisno ◽  
Aulia Fuad Rahman
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Stock Prices ◽  
Value Relevance ◽  
Accounting Information ◽  
Fair Value ◽  
Financial Assets ◽  
Fair Value Measurement ◽  
Value Measurement

Accounting information is one of many informations that is used in making decisions by investors. Accounting information has value relevance when the information raises investor reactions, meaning that the information is used for decision making that affects stock prices. This study aimed to examine the value relevance of earning value and the fair value measurement of non-financial assets, along with the role of corporate governance in increasing the value relevance of both informations. This study used 142 companies listed on the Indonesia Stock Exchange during 2012-2017 as study samples. Moedaretd Regression Analysis was used as an analytical tool to test the relationship of study variables. The results showed that earning and the fair value measurement of non-financial assets had value relevance. Both of these informations are considered useful by investors for their decision making. Corporate governance was found to play a role in increasing the value relevance of earning and the fair value measurement of non-financial assets. Corporate governance is able to reduce agency conflicts that can cause information to be biased for investors. The existence of corporate governance provides assurance that informations has been fairly presented to investors, thereby increasing value relevance.

scholarly journals The effects of audit quality on the value relevance of other comprehensive incomes

2015 ◽  
Vol 18 (1) ◽  
pp. 145
Author(s):  
Levinska Primavera ◽  
Taufik Hidayat
Keyword(s):  
Audit Quality ◽  
Value Relevance ◽  
Fair Value ◽  
Net Income ◽  
Financial Industry ◽  
Industry Data ◽  
Comprehensive Income ◽  
Fixed Assets ◽  
Other Comprehensive Income ◽  
Cross Section Method

Stockholders claim deals with handling crucial role to investors while another ac-counting measurement has not yet been paid attention by the investors and analysts. Beside, another comprehensive income despite of its equal role to net income also re-quires a deep concern. This research uses financial industry data in Indonesia Capital Market for 2011-2012 under panel method and also cross-section method as the addi-tional analysis. This research assesses the effect of audit quality on value relevance of other comprehensive income regarding subjectivity embedded in other comprehensive income components. These components are determined through fair value aspects, which eventually lead to management discretion in measuring other comprehensive income components. Subjective components of other comprehensive incomes consist of foreign exchange translation (forex), revaluation in fixed assets (rev), minimum pension liability adjustment (pen), and available-for-sale securities adjustment (sec). The audit quality is believed as a mechanism which can increase the value relevance of subjective of other comprehensive income components. On the other hand, when as-sessing the value relevance of other comprehensive income components both indivi-dually and in aggregate, it is encouraged by inconsistency of previous research results.

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