| This study examines changes in the value relevance of earnings and book values over the past four decades. Using the residual income valuation approach, I develop three new measures of value relevance. My results, based on alternative measures of value relevance that differ from earlier studies (Francis and Schipper 1998; Collins, Maydew, and Weiss 1997) suggest that the value relevance of earnings and book values has declined over time. I find that the structural change in the value relevance of accruals occurred in the mid-1970's. |