Title: Changes in the value relevance of accounting information before and after the adoption of K-IFRS: evidence from Korea

Authors: Gee Jung Kwon

Addresses: Department of Business Administration and Accounting, Hanbat National University, 125 Dongseodaero, Yuseong-Gu, Daejeon 305-719, South Korea

Abstract: This paper aims to investigate the value relevance change before and after the mandatory adoption of Korea's international financial reporting standards (K-IFRS) in the listed Korean financial markets. This paper tests the value relevance change by dividing sample data into the periods before (2008-2010) and after (2011-2013) K-IFRS adoption. This study categorises sample data into several subgroups by firm size (large versus small and medium) and applicable financial market (KOSPI versus the KOSDAQ) for revealing further evidence of the value relevance change in Korean companies. The empirical results in this paper suggest that the value relevance of book value, accounting earnings, operating income, cash flows, and operating cash flows significantly changed before and after K-IFRS adoption. This paper's evidence suggests the possibility of a new debate regarding the primary value relevant factor before and after K-IFRS adoption among the companies listed on the Korea Stock Exchange.

Keywords: book value; BV; cash flows; CF; Korea's international financial reporting standards; K-IFRS; net income; operating cash flows; OCF; operating income; OI; value relevance.

DOI: 10.1504/AAJFA.2018.089209

Afro-Asian Journal of Finance and Accounting, 2018 Vol.8 No.1, pp.65 - 84

Received: 27 Dec 2016
Accepted: 14 Jun 2017
Published online: 09 Jan 2018 *

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