Assessing the Value Relevance of Accounting Data After the Introduction of IFRS in Europe

Alain Devalle, Enrico Onali, Riccardo Magarini

2010-04-13articleJournal of International Financial Management and Accounting242 citationsbronze

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Auditing, Earnings Management, Governance Accounting Theory and Financial Reporting Financial Reporting and Valuation Research

Abstract

Abstract Since 2005, European‐listed companies have been required to prepare their consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS). We examine whether value relevance increased following the introduction of IFRS, using a sample of 3,721 companies listed on five European stock exchanges: Frankfurt, Madrid, Paris, London, and Milan. We find mixed evidence of an increase in value relevance. However, the influence of earnings on share price increased following the introduction of IFRS in Germany, France, and the United Kingdom, while the influence of book value of equity decreased (except for the United Kingdom).

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