The IFRS Adoption: Contribution to Valuation Theory  

Oleh:

Mayangsari, Sekar

Jenis: Article from Journal - ilmiah nasional - terakreditasi DIKTI
Dalam koleksi: Journal of Economics, Business, & Accountancy: ventura vol. 13 no. 3 (Dec. 2010), page 265-276.
Topik: Accounting Harmonization; IAS/IFRS; Value Relevance

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: VV5.8 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

The transition to IFRS has brought fundamental changes as it has impact on corporate accountants, public auditors, investors and its influence extends well beyond the change in accounting rules. The purpose of the paper is to investigate whether the information on IFRS adjustments is value relevant. This paper analyses value-relevance, incremental, and relative association of the effects of IFRS reconciliation reflected in earings and owners' equity, versus Indonesia GAAP measures. This study adopts a market value model, which relates a firm's earing to shareholders' equity measured under Indonesia GAAP together with the respective IFRS reconciliation adjustment, to its market value, adding some firm specific factors to the regressions. This research uses regression to test the hypothesis. The results show that IFRS adjustments improve financial reporting quality and the capacity of financial statements to explain firm values, over and above the INDONESIA GAAP numbers. However, the effect is not equally distributed given that they are more significant for larger firms. The research also reveals that the market places a high value on the earnings reconciliaton adjustments but, in general, it appears that the LASB has had at least some success in providing relevant information because it has the capacity to make a difference in investors' decisions.

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