The International Financial Reporting Standards (IFRS) adoption and value relevance

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Abstract

This research examines the impact of the International Financial Reporting Standards (IFRS) on value relevance (VR). It is reported that most previous studies that address value relevance relationships with the IFRS have found conflicting results. For example, a reduction in VR in the US but it enhances in most reviewed studies (Gao et al., 2022). According to the findings, the impact of implementing IFRS varies from country to country. In the UK, the IFRS adoption has decreased the book value (BV) while in France and Germany, has increased. After adopting IFRS during the financial crisis, the findings also suggest that the VR has fallen in these nations. All financial institutions trading on the stock markets of these three nations serve as a sample for this study. Quantitative methods are used to collect data for this study, while SPSS is used for statistical analysis. The data was analysed prior to IFRS (2000–2004), for the global financial crisis of 2008, and later IFRS (2006–2015). This study adds to accounting knowledge by analysing the results of IFRS adoption throughout the time frames. In addition, it helps accounting standards setters and policymakers in developing IFRS quality and establishing related policies.

Keywords: IFRS, Value Relevance, Reporting Quality, Financial Crises

Authors’ individual contribution: Conceptualization — H.A.N.A.-R.; Methodology — S.S.K.A.-S.; Validation — H.A.N.A.-R., S.S.K.A.-S., and A.S.A.; Formal Analysis — S.S.K.A.-S.; Investigation — H.A.N.A.-R.; Data Curation — A.S.A.; Writing — Original Draft — H.A.N.A.-R.; Writing — Review & Editing — H.A.N.A.-R., S.S.K.A.-S., and A.S.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

Acknowledgements: The Authors would like to begin by thanking the Faculty of Administration and Economics, University of Karbela, Iraq, for its financial support to do this research. Also, the Authors would like to thank their colleagues in Accounting Department for their help and recommendations throughout the research process.

JEL Classification: M410, M480, M41, N24

Received: 09.07.2022
Accepted: 30.01.2023
Published online: 31.01.2023

How to cite this paper: Al-Refiay, H. A. N., Al-Shaikh, S. S. K., & Abdulhussein, A. S. (2023). The International Financial Reporting Standards (IFRS) adoption and value relevance. Corporate & Business Strategy Review, 4(1), 69–86. https://doi.org/10.22495/cbsrv4i1art7