Pertinence des mesures non-GAAP pour les marchés boursiers: le cas des firmes du CAC 40

Denis Cormier and Samira Demaria
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Denis Cormier: ESG UQAM, Montreal, Canada
Samira Demaria: University of Nice Sophia Antipolis, France

No 2014-22, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: This study focuses on the use of non-GAAP by French companies (CAC 40) and its impact on the stock market controlling for corporate governance. Our main results are as follows. First, we find a complementary effect between residual earnings and non- GAAP for market valuation. Second, in the presence of good governance, the impact of the publication of non-GAAP (number) on the valuation of residual results decreases. This could mean an abundance of non-GAAP reduces its relevance. Corporate governance would substitute to non-GAAP measures (number) for residual earnings valuation. Third governance itself has a positive impact on residual earnings valuation. However, unlike the number of non-GAAP published, the level of detail (number of pages) is not affected by corporate governance in residual earnings valuation. This could be explained by the fact that the AMF advocates for a reconciliation of non-GAAP and IFRS financial data. Fourth, our results suggest that after a certain threshold, non-GAAP (number or pages) create asymmetry in equity markets.

Keywords: Corporate governance; Non-GAAP; Residual earnings; Stock market valuation (search for similar items in EconPapers)
JEL-codes: G14 M41 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-07
New Economics Papers: this item is included in nep-acc, nep-cfn and nep-eur
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