The predictive ability of investment property fair value adjustments under IFRS and the role of accounting conservatism

Sati P. Bandyopadhyay, Changling Chen and Mindy Wolfe

Advances in accounting, 2017, vol. 38, issue C, 1-14

Abstract: This paper examines the predictive ability (relevance) of fair value adjustments of Canadian investment property, for future cash flow outcomes. We hypothesize and find that the fair value adjustments of more conservative firms are more predictive of future cash flows. We also find that the market prices fair value adjustments of more conservative firms at a premium as compared to those of less conservative firms. Our empirical tests control for possible self-selection of sample firms into low and high accounting conservatism groups.

Date: 2017
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:38:y:2017:i:c:p:1-14

DOI: 10.1016/j.adiac.2017.05.002

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