Horton, Joanne and Serafeim, George (2010) Market reaction to and valuation of IFRS reconciliation adjustments: first evidence from the UK. Review of Accounting Studies, 15 (4). pp. 725-751. ISSN 1380-6653
Full text not available from this repository.Abstract
We investigate the market reaction to, and the value-relevance of, information contained in the mandatory transitional documents required by International Financial Reporting Standards 1 (2005). We find significant negative abnormal returns for firms reporting negative earnings reconciliation. Although the informational content of the positive earnings adjustments is value-relevant before disclosure, for negative earnings adjustments it is value-relevant only after disclosure. This finding is consistent with managers delaying the communication of bad news until IFRS compliance. A finer model shows that adjustments attributed to impairment of goodwill, share-based payments, and deferred taxes are incrementally value-relevant but that only the impairment of goodwill and deferred taxes reveal new information. Our results indicate that mandatory IFRS adoption alters investors’ beliefs about stock prices.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.springerlink.com/content/102988/ |
| Additional Information: | © 2009 Springer Science + Business Media, LLC |
| Divisions: | Accounting |
| Subjects: | H Social Sciences > HF Commerce > HF5601 Accounting |
| Date Deposited: | 07 Mar 2011 16:34 |
| Last Modified: | 11 Dec 2024 23:45 |
| URI: | http://eprints.lse.ac.uk/id/eprint/32827 |
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