A Valuation Based Analysis of the Spanish Accounting Reforms

Begoña Giner () and William Rees

Journal of Management & Governance, 1999, vol. 3, issue 1, 48 pages

Abstract: This paper contrasts the association between security prices and accounting information before and after the Spanish accounting reforms. Spanish regulations were changed during 1989 and 1990 so as to conform with EU requirements, bringing them broadly into line with international standards, although the new system still focuses on compliance with rules rather than reflecting the substance of economic transactions. We model security price as a function of two fundamental accounting variables -- book value of equity per share and earnings per share. The model is estimated using a sample drawn from non-financial companies listed on the Madrid Stock Exchange during the period 1986--1995. Whilst the results demonstrate only a modest improvement in value relevance of accounting information following the reform, they show that the influence of the earnings variable becomes somewhat smaller whilst that on equity is increased. This is consistent with earnings containing a larger proportion of transitory elements following the reform, whilst the equity value appears to have more economic relevance than previously. Copyright Kluwer Academic Publishers 1999

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://hdl.handle.net/10.1023/A:1009968532672 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jmgtgv:v:3:y:1999:i:1:p:31-48

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10997/PS2

DOI: 10.1023/A:1009968532672

Access Statistics for this article

Journal of Management & Governance is currently edited by Lino Cinquini

More articles in Journal of Management & Governance from Springer, Accademia Italiana di Economia Aziendale (AIDEA) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().