This study examines whether the reconciliation amounts between IFRS and PRC GAAP provide additional incremental value-relevant information. More specifically, it investigates whether firms applying IFRS experience an ...This study examines whether the reconciliation amounts between IFRS and PRC GAAP provide additional incremental value-relevant information. More specifically, it investigates whether firms applying IFRS experience an increase in the quality of accounting information in the post-IFRS convergence period. Results show that IFRS convergence increases the values of balance-sheet items and enlarges variation across firms. Moreover, there is no difference in the explanatory power of value relevance of accounting information under IFRS and PRC GAAP for share prices and returns of A-shares. The incremental value relevance analysis suggests that the IFRS adjustments to earnings are value relevant, whereas the adjustments to book values are not. The IFRS adjustments to change in inventory are value relevant for predicting future operating cash flows. Finally, accounting quality improved in post-convergence period. These results are robust after controlling for the unique characteristics of Chinese firms.展开更多
文摘This study examines whether the reconciliation amounts between IFRS and PRC GAAP provide additional incremental value-relevant information. More specifically, it investigates whether firms applying IFRS experience an increase in the quality of accounting information in the post-IFRS convergence period. Results show that IFRS convergence increases the values of balance-sheet items and enlarges variation across firms. Moreover, there is no difference in the explanatory power of value relevance of accounting information under IFRS and PRC GAAP for share prices and returns of A-shares. The incremental value relevance analysis suggests that the IFRS adjustments to earnings are value relevant, whereas the adjustments to book values are not. The IFRS adjustments to change in inventory are value relevant for predicting future operating cash flows. Finally, accounting quality improved in post-convergence period. These results are robust after controlling for the unique characteristics of Chinese firms.
基金Hu and Yao would like to thank Chitoshi Koga （Doshisha University）, Norio Igarashi （Yokohama National University）, and Hajime Yasui （director of Aarata Institute, PwC Japan） for assisting in the data collection of this study. Hu thanks the funding support from Japan Society for the Promotion of Science （JSPS） KAKENHI Grant Number 24730385, JSPS Strategic Young Researcher Overseas Visits Program Number J2302, and Nitto Promotion of Science Foundation.
