The value-relevance of disclosed summarised financial information of listed associates

Wessel M. Badenhorst, Leon M. Brümmer and Johannes H.vH. de Wet

Journal of International Accounting, Auditing and Taxation, 2015, vol. 24, issue C, 1-12

Abstract: While prior research considers limited elements of the summarised financial information reported for equity accounted associates under IAS 28, it does not address the collective or incremental value-relevance of these disclosures. Therefore, this study investigates the incremental value-relevance of all required elements of disclosed summarised financial information for listed associates, and controls for reported fair values. Findings suggest that individual elements of these summarised disclosures are sometimes incrementally value-relevant, but that elements have the greatest incremental value-relevance as a group. These findings suggest that investors value a firm's investments in listed associates at a self-developed intrinsic value, rather than using the market value (or fair value) of that associate directly. Therefore, underlying accounting information of listed associates remains value-relevant, even when alternative market-based valuations are available.

Keywords: Equity accounting; Investments in associates; Disclosure (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1061951815000051
Full text for ScienceDirect subscribers only

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:eee:jiaata:v:24:y:2015:i:c:p:1-12

DOI: 10.1016/j.intaccaudtax.2015.02.002

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().