The Information Content of Financial Information Under PSAK 24 (2010)

• In Event: Breakfast and Roundtable
  In Roundtable: Roundtable 3

Abstract

This study examines the information content of financial information in the initial adoption of PSAK 24 year 2010. Using the sample of 35 manufacturing firms listed in Indonesian Stock Exchange (IDX) with the fiscal year ending on December 31, 2011 and 2012, this study performs a simple event study to measures the information content of new financial information. Metric explanation using cross section linear regression examines the extent of financial information under PSAK 24 (2010) that influence cumulative abnormal return. The results indicate that there is a significant abnormal return during the event window of the financial information announcement date. This study finds the financial information under PSAK 24 (2010) have greater information content than financial information under PSAK 24 (2004). The cross sectional analysis finds evidence that the abnormal return is associated with financial information under PSAK 24 (2010).

Author

• MUHAMMAD IRKA IRFA DAROJAT, University of Gadjah Mada