Value Relevance of Book Value & Earnings Under the Local GAAP and IFRS: Evidence from Turkey

Gulhan Suadiye ()
Additional contact information
Gulhan Suadiye: Mustafa Kemal Universitesi, Iktisadi ve Idari Bilimler Fakultesi, Isletme Bolumu

Ege Academic Review, 2012, vol. 12, issue 3, 301-310

Abstract: This study examines empirically the impact of International Financial Reporting Standards (IFRS) on the value relevance of accounting information in Turkey. Turkish listed firms on the Istanbul Stock Exchange (ISE) are required to adopt IFRS in the preparation and presentation of their financial statements since 2005. Using the equity valuation model as suggested by Ohlson (1995), firstly, the value relevance of earnings and book values of equity produced under Turkish Local Standards (during 2000-2002) and under IFRS (during 2005-2009) is analyzed. And then, these two periods are compared to investigate whether the mandatory adoption of IFRS has an impact on value relevance of accounting information. The analysis results show that earnings and book value are, jointly and individually, positively and significantly related to stock price under the two different reporting regimes. Additionally, the results provide that book value of equity is more value relevant than earnings. When two different reporting standards are compared, it is found that the adoption of IFRS increased the value relevance of accounting information for Turkish listed firms. This study contributes to the existing literature on the value relevance of accounting information and to the debate over the mandatory adoption of IFRS.

Keywords: IFRS; value relevance; local GAAP; capital markets (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.onlinedergi.com/makaledosyalari/51/pdf2012_3_2.pdf (application/pdf)
http://onlinedergi.com/eab/arsiv/arsivDetay.aspx?yil=2012&peryot=3 Website of the journal issue (text/html)

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:ege:journl:v:12:y:2012:i:3:p:301-310

Access Statistics for this article

Ege Academic Review is currently edited by Özlem Önder

More articles in Ege Academic Review from Ege University Faculty of Economics and Administrative Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Baris Gök ().