Empirical value relevance of German GAAP and IFRS
It seems logical to assume that GAAP aimed at informing investors show a higher association with share prices (value relevance) than GAAP aimed at protecting creditors. The majority of empirical studies support this assumption. This paper examines the value relevance of IFRS and German GAAP. Regress...
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| Format: | Article |
| Language: | English |
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AOSIS
2007-10-01
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| Series: | Journal of Economic and Financial Sciences |
| Subjects: | |
| Online Access: | https://jefjournal.org.za/index.php/jef/article/view/365 |
| _version_ | 1811272752102899712 |
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| author | H. Alexander Schiebel |
| author_facet | H. Alexander Schiebel |
| author_sort | H. Alexander Schiebel |
| collection | DOAJ |
| description | It seems logical to assume that GAAP aimed at informing investors show a higher association with share prices (value relevance) than GAAP aimed at protecting creditors. The majority of empirical studies support this assumption. This paper examines the value relevance of IFRS and German GAAP. Regression analyses are applied to companies listed on the Frankfurt Stock Exchange and publishing exclusively either IFRS or German GAAP consolidated financial reports over the period 2000-2004. As a result of Regulation (EC) No 1606/2002, comparative research becomes impossible after 2004: German GAAP will no longer exist on European stock exchanges. The paper’s study is restricted to a single capital market in order to eliminate pricing differences between capital markets based in different countries that have already been done in earlier research. Improved circumstances for investigating value relevance compared with earlier research are, however, the selection criteria for the listed companies (emphasis on international transparency requirements, free float and free float market capitalisation) and the share prices used (average price around the end of the business year when the financial reporting data is not yet published). The results of the study show that German GAAP is statistically more value relevant than IFRS. These results have to be interpreted in the light of the selection criteria. It is an unexpected outcome calling for further research. |
| first_indexed | 2024-04-12T22:45:55Z |
| format | Article |
| id | doaj.art-5d47186e396b4ef3ba98e9cfd1c342ad |
| institution | Directory Open Access Journal |
| issn | 1995-7076 2312-2803 |
| language | English |
| last_indexed | 2024-04-12T22:45:55Z |
| publishDate | 2007-10-01 |
| publisher | AOSIS |
| record_format | Article |
| series | Journal of Economic and Financial Sciences |
| spelling | doaj.art-5d47186e396b4ef3ba98e9cfd1c342ad2022-12-22T03:13:32ZengAOSISJournal of Economic and Financial Sciences1995-70762312-28032007-10-011214117010.4102/jef.v1i2.365306Empirical value relevance of German GAAP and IFRSH. Alexander Schiebel0Vienna University of Economics and Business AdministrationIt seems logical to assume that GAAP aimed at informing investors show a higher association with share prices (value relevance) than GAAP aimed at protecting creditors. The majority of empirical studies support this assumption. This paper examines the value relevance of IFRS and German GAAP. Regression analyses are applied to companies listed on the Frankfurt Stock Exchange and publishing exclusively either IFRS or German GAAP consolidated financial reports over the period 2000-2004. As a result of Regulation (EC) No 1606/2002, comparative research becomes impossible after 2004: German GAAP will no longer exist on European stock exchanges. The paper’s study is restricted to a single capital market in order to eliminate pricing differences between capital markets based in different countries that have already been done in earlier research. Improved circumstances for investigating value relevance compared with earlier research are, however, the selection criteria for the listed companies (emphasis on international transparency requirements, free float and free float market capitalisation) and the share prices used (average price around the end of the business year when the financial reporting data is not yet published). The results of the study show that German GAAP is statistically more value relevant than IFRS. These results have to be interpreted in the light of the selection criteria. It is an unexpected outcome calling for further research.https://jefjournal.org.za/index.php/jef/article/view/365conservatismGerman GAAPIFRScapital marketvalue relevance |
| spellingShingle | H. Alexander Schiebel Empirical value relevance of German GAAP and IFRS Journal of Economic and Financial Sciences conservatism German GAAP IFRS capital market value relevance |
| title | Empirical value relevance of German GAAP and IFRS |
| title_full | Empirical value relevance of German GAAP and IFRS |
| title_fullStr | Empirical value relevance of German GAAP and IFRS |
| title_full_unstemmed | Empirical value relevance of German GAAP and IFRS |
| title_short | Empirical value relevance of German GAAP and IFRS |
| title_sort | empirical value relevance of german gaap and ifrs |
| topic | conservatism German GAAP IFRS capital market value relevance |
| url | https://jefjournal.org.za/index.php/jef/article/view/365 |
| work_keys_str_mv | AT halexanderschiebel empiricalvaluerelevanceofgermangaapandifrs |