Capital Market Effects of the IFRS Adoption for Separate Financial Statements: Evidence from the Italian Stock Market

Palea Vera ()
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Palea Vera: University of Turin, http://www.est.unito.it/

Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin

Abstract: Using a sample of Italian firms, I investigate whet her separate financial statements are useful to capital market investors and IFRS are more value-relevant than domestic GAAP. I find significant differences in value-relevance between Italian GAAP and IFRS, with IFRS being more informative than Italian GAAP. However, while results are robust for book value, they provide mixed evidence on net income. I also investigate the value-relevance of separate financial statements under IFRS relative to consolidate financial statements and I find that the former are more value-relevant than the latter. Overall, this study provides evidence supporting the choice of adopting IFRS for separate financial statements.

Pages: 30 pages
Date: 2013-03
New Economics Papers: this item is included in nep-acc and nep-eur
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