Title: Accounting valuation models under international financial reporting standards: evidence from some European listed companies

Authors: Ahmed Kouki

Addresses: Department of Accounting, Faculty of Economics and Management, Sfax University, Sfax 3018, Tunisia; Laboratory LARTIGE, Faculty of Economics and Management of Sfax, Airport Road km 4, Sfax 3018, Tunisia

Abstract: The aim of this paper is to examine the value relevance of accounting information following the voluntarily IFRS adoption in the pre-IFRS period (from 2000 to 2004). Moreover, this paper compares the relevance of the two accounting valuation models as the historical cost versus Fair Value Accounting (FVA) following the mandatory IFRS adoption. We use a panel data collected from a sample of 106 firms listed at the stock exchange of three European countries (Germany, France and Belgium). The results suggest that the value relevance of accounting information in firms that voluntarily adopt IFRS decreases compared to in firms that report their financial statements into domestic standards (DS). Our findings confirm that the FVA model is more relevant than historical cost accounting model. This paper contributes to the existing literature by comparing the accounting quality of voluntary IFRS-firms and DS-firms and the choice of the more relevant accounting valuation models. This study highlights the importance of fair value for the improvement of investors' making decisions.

Keywords: IFRS adoption; International Financial Reporting Standards; FVA; fair value accounting; historical cost accounting; valuation models; share price; environmental determinism theory; neo-institutional theory; Germany; France; Belgium; accounting information; value relevance; financial statements.

DOI: 10.1504/IJMFA.2015.067504

International Journal of Managerial and Financial Accounting, 2015 Vol.7 No.1, pp.82 - 101

Available online: 14 Feb 2015 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article