The Value Relevance of IFRS in U.S. Capital Markets

• In Event: Research in Accounting Standards

Abstract

Abstract: Both value relevance and the adoption of International Financial Reporting Standards (IFRS) are topics that have been extensively covered in the accounting literature; however, it is still unclear what effect the adoption of IFRS in the United States would have on the value relevance of accounting information. This study will attempt to fill this gap by comparing the value relevance of accounting information over the period 2004 to 2012 for firms using U.S. GAAP and firms using IFRS. The sample will consist entirely of foreign private issuers that are cross-listed and filing financial statements in the United States. Results indicate that, contrary to the hypothesized relationship, IFRS financial statements appear to be more value relevant for foreign firms in the U.S. than U.S. GAAP financial statements. However, the significance of these results disappears after controlling for other firm-specific factors that affect the value relevance of accounting information.

Author

• Jennifer Lynn Yardley, The University of Texas at Arlington