The impact of IFRS adoption on the value relevance of accounting information in Saudi Arabia

Abdulrahman Alomair, Alan Farley and Helen Hong Yang

Accounting and Finance, 2022, vol. 62, issue 2, 2839-2878

Abstract: We examined the joint and relative value relevance of book value of equity (BVE) and earnings before (2015–2016), after (2017–2018) and during the comparative year (2016) of mandatory adoption of International Financial Reporting Standards (IFRS) in Saudi Arabia. Results show that the accounting information is jointly value relevant (R2), with no significant change between accounting information prepared under Saudi GAAP and IFRS. However, we found a positive change in the relative value relevance of the BVE after IFRS implementation, mainly related to the introduction of fair value measurement. Differences in value relevance were found across variances in company characteristics.

Date: 2022
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