Value relevance of accounting information during IFRS convergence period: comparative evidence between India and Indonesia

Purpose This study aims to examine the financial reporting quality during the International Financial Reporting Standards (IFRS) enforcement period in the emerging markets of India and Indonesia by using Ohlson’s (1995) valuation model. The study further endeavors to compare the quality of the reporting environment and its impact on stock prices for both these emerging economies by using a price model during the IFRS conversion period. Design/methodology/approach This paper aspires to obtain insights about the value relevance of accounting information during the IFRS enforcement period for India and its Southeast Asian neighbor, Indonesia which is identical in terms of inclusive growth and development. In that context, 3,325 Indian (National Stock Exchange indexed) and 815 Indonesian (Indonesian stock exchange indexed) firm-year observations were examined by using Ohlson’s price valuation model for five years, representing the IFRS adherence period. Findings The findings of the paper insinuated that the value relevance of book values and earnings, both, have increased throughout the IFRS enforcement period for both economies. However, the investigation revealed that the incremental interpretive power of earnings is more substantial and evident during the IFRS adherence phase than book values which indicates investor’s inclination toward earnings management over book values. Research limitations/implications The findings may assist the regulators, investors, firms and standard setters of both economies in examining the effectiveness of financial reporting curriculums as it brings forth informational improvement in the financial market. This study also outstretches the discussion on the subject in other emerging nations where the market is imperfect with insufficient information, poor enforcement and limited regulations. This investigation has few limitations such as limited data and period, only two emerging economies and two control variables, thus provide scope for future research. Social implications This paper endeavors to investigate and compare the value relevance of accounting information during IFRS convergence period between India and Indonesia with an aim to assist in improved decision making for both, regulatory bodies and market participants in both the countries. Originality/value The key contribution of the study is to examine whether the accounting information is value relevant during the IFRS convergence period for the two fastest-growing economies in Asia, India and Indonesia and it is the first such empirical research to the best of the author’s knowledge. The study is an extended contribution to the modest research administered in developing nations.

Value relevance of earnings and book values during IFRS convergence period in India

Purpose The authors aim to examine the association between earnings and book values with stock prices in India during the IFRS convergence period because, in India, the literature is yet to investigate more about IFRS convergence and its impact on the financial reporting environment. Hence, the purpose of this study is to assess the influence of IFRS conversion on the value relevance of accounting information throughout the IFRS conversion period. Design/methodology/approach The current paper endeavors to investigate the earnings and book values affiliation with stock prices in India during the IFRS convergence period by employing a price valuation model (Ohlson’s Model). The study assembled a total of 3,440 firm-year observations from the National Stock Exchange in India over five years, which signifies the IFRS conversion period (2015–2019). Findings The research findings displayed that accounting information such as earnings, book value has value relevance throughout the IFRS enforcement period; however, the value relevance has been increasing for earnings and showing a descending association for book value. The significant explanatory power of earnings reveals that market participants give more weightage to earnings than book values. Overall, the findings of the study will facilitate improved decision making for both, capital market participants and regulators, by highlighting the key areas for improvement in the Indian capital market. Research limitations/implications This study also extends a discussion on the subject in those economies where regulations are weak and the market is imperfect with asymmetrical information. Practical implications The research outcome provides for empirical shreds of evidence regarding the value relevance of accounting information during IFRS enforcement in India, where IFRS is a recent emergence. Social implications This paper examines the value relevance of accounting information during IFRS convergence period in India which will felicitate improved decision making for both, market regulators and investors. Originality/value This research is the first factual documentation regarding value relevance of earnings and book value during the IFRS enforcement process in India with the most recent data and contributes to the limited study conducted in developing nations like India.

Systemic risk in ASEAN-6: a new empirical investigation

PurposeThe authors provide a comprehensive study on systemic risk of the banking sectors in the ASEAN-6 countries. In particular, they investigate the systemic risk dynamics and determinants of 49 listed banks in the region over the 2000–2018 period.Design/methodology/approachThe authors employ the market-based SRISK measure of Brownlees and Engle (2017) to investigate the systemic risk of the ASEAN-6's banking sectors.FindingsThe authors find that the regional systemic risk fluctuates significantly and currently at par or higher level than that of the recent global financial crisis. Systemic risk is generally associated with banks that have bigger size, more traditional business models, lower quality in their loan portfolios, less profitable and with lower market-to-book values. However, these relationships vary significantly between ASEAN countries.Research limitations/implicationsThe research focuses on the systemic risk of ASEAN-6 countries. Therefore, the research results may lack generalizability to other countries.Practical implicationsThe authors’ empirical evidence advocates the use of capital surcharges on the systemically important financial institutions. Although the region has been pushing to higher financial integration in recent years, the authors encourage the regional regulators to account for the idiosyncratic characteristics of their banking sectors in designing effective macroprudential policy to contain systemic risk.Originality/valueThis paper provides the first study on the systemic risk of the ASEAN-6 region. The empirical evidence on the drivers of systemic risk would be of interest to the regional regulators.

EFEK KONTRIBUSI STRUKTUR KEPEMILIKAN DAN KEPUTUSAN PENDANAAN DALAM MENINGKATKAN NILAI PERUSAHAAN

Ownership structure and funding decisions are determinants of company value, so this study was conducted with the intent to examine the contribution of ownership structures proxied by institutional ownership and funding decisions through debt to equity ratios as proxies in analyzing company values proxied through price to book values. The unit of analysis used is the financial statements of 18 issuers of the manufacturing sub-sector which were listed on the Indonesia Stock Exchange (BEI) in 2015-2018 (nine of them did not meet the sampling criteria). The results of data analysis provide evidence if the contribution of ownership structure that is proxied by institutional ownership is not able to increase the price to book value, the evidence has in common in explaining the contribution of a positive debt to equity ratio in increasing price to book value.

ETHNOMUSIC, ETHNOPHORE, ETHNOGRAPHER

The article presents issues related to the study of the triad of «ethno music, ethnophor, ethnographer» in the axiological aspect. Their research is updated in connection with the consideration of the trinity of «ethno music, ethnophor, ethnographer» in the global world from the point of view of the spiritual and cultural values of the Kazakh people aimed to increase their importance in modern society. The necessity of theoretical understanding of the problem «ethno ear» («auditory abilities of the ethnos») is revealed - which is a common «tool» in the trinity of the concepts of ethno music, ethnophor and ethnographer, which is the rationale for such important moments related to national identity as «intonation specificity», «culture of listening / listening», « memorizing skills», «ways of articulation», etc. It is emphasized that in the course of analyzing the genres that form the basis of ethno music, it is advisable to re-examine the contribution of outstanding personalities – those people who have managed to transmit them to the present day, and those who have been able to record them. Moreover, not considering the examples, methods of upbringing, lifestyle and worldview, customs and traditions of the ancestors only as a shady of images of the distant past or book values, but working to ensure their real «return» to everyday life through the firm fixation in the minds of the younger generations. Thanks to this, one can awaken the respect for the national cultural heritage in young people. In the course of the development of these issues by genre directions, the works of domestic researchers, scientists from foreign and CIS countries were taken into account. The main theses of the article can serve in the future as a guide and necessary support for students of traditional music, secondary specialized and higher educational institutions, Master, PhD students and teachers.

Fungsi Corporate Social Responsibility Disclosure dan Independent Commissioning: Relevancy Of Accounting Information

This research specifically aims to determine the moderating effect of CSR disclosure on the relevance of earnings value and book value. In addition, this study also aims to prove the different effects of CSR disclosure moderation on the relevance of earnings and book values ??in companies that have and do not have an independent board of commissioners. In this journal the accounting information reviewed includes the value of earnings and book value. Profit is the information in financial statements that is most often used by investors in company valuations. Book value is very important and cannot be ignored in measuring the relevance of earnings. Accounting information is said to have value relevance if the accounting information can be used to predict the market value of the company. In addition, this study also examines the differences in the effect of CSR exposure on earnings and book values ??for companies that have Independent commissioning and companies that do not have Independent commissioning. Non-financial information that also plays a role in value relevance is a corporate governance mechanism. The corporate governance mechanism adopted by the company includes establishing an independent board of commissioners. The test results show that earnings and book values ??have value relevance. The moderating effect of CSR disclosure on the relevance of earnings and book values ??shows that CSR disclosure decreases the relevance of earnings but increases the relevance of book values. From the results of the Chow test results indicate that there are differences in the CSR moderation coefficient on the relevance of earnings and book values ??in companies that do not have Independent commissioning. Key words: value relevance; earnings; book value; independent board of commissioners. ABSTRAK: Penelitian ini secara spesifik bertujuan untuk mengetahui efek moderasi pengungkapan CSR terhadap relevansi nilai laba dan nilai buku. Selain itu, penelitian ini juga bertujuan untuk membuktikan perbedaan efek moderasi pengungkapan CSR terhadap relevansi nilai laba dan nilai buku pada perusahaan yang memiliki dan tidak memiliki Dewan Komisaris Independen. Dalam jurnal ini informasi akuntansi yang dikaji meliputi nilai laba dan nilai buku. Laba merupakan informasi dalam laporan keuangan yang paling sering dipakai oleh para investor dalam penilaian perusahaan. Nilai buku sangatlah penting dan tidak dapat diabaikan dalam pengukuran relevansi nilai laba. Informasi akuntansi dikatakan memiliki relevansi nilai jika informasi akuntansi tersebut bisa digunakan untuk memprediksi nilai pasar perusahaan Selain itu Pada penelitian kali ini juga mengkaji perbedaan pengaruh pendedahan CSR terhadap nilai laba dan nilai buku untuk perusahaan yang memiliki independent commissioning dan perusahaan yang tidak memiliki independent commissioning. adapun Informasi non keuangan yang turut berperan dalam relevansi nilai adalah mekanisme corporate governance. Mekanisme corporate governance yang diterapkan oleh perusahaan antara lain adalah dengan membentuk dewan komisaris independen. Hasil pengujian menunjukkan bahwa laba dan nilai buku memiliki relevansi nilai. Efek moderasi pengungkapan CSR terhadap relevansi nilai laba dan nilai buku menunjukkan bahwa pengungkapan CSR menurunkan relevansi nilai laba namun meningkatkan relevansi nilai nilai buku. Dari hasil Hasil uji Chow menunjukkan bahwa terdapat perbedaan koefisien moderasi CSR terhadap relevansi nilai laba dan nilai buku pada perusahaan yang tidak memiliki Independent commissioning.

RELEVANSI NILAI LABA, NILAI BUKU EKUITAS, ARUS KAS OPERASI DAN DIVIDEN

The relevance of the value of accounting information presented must have the ability to explain the value of a company. Accounting information in the form of financial statements is said to be relevant if the information can be useful for investors in making decisions and the reaction of investors when information is announced that can be observed through stock price movements because stock prices reflect the value of the company. The theories used in this study are the theory of clean surplus, signaling theory, and theory of market efficiency. Based on the purposive sampling method obtained as many as 79 companies, with a total of 237 samples. The analysis techniques used are pooling test, classic assumption test, descriptive statistical test, F test, t-test, and test coefficient of determination. The data used is secondary data obtained from www.idx.co.id. The results showed that earnings, equity book values, operating cash flows, and dividends proved to have a positive influence on stock prices.Keywords : Earnings, book value of equity, operating cash flows, dividends, and stock price

Have accounting measures lost their usefulness after the 2008 global financial crisis?

Purpose This purpose of this paper is to investigate the value relevance and incremental importance of earnings and book value in the Kuwaiti market to equity holders over time and in the context of the decade after the 2008 global financial crisis. Design/methodology/approach Following reports in the literature, the value relevance of earnings and book values was examined using the price valuation model provided by Ohlson (1995). Observations (2,817) were collected from all firms listed on the Kuwait Stock Exchange from 1994 to 2016. Findings The results suggest that the value relevance of earnings and book values declined over this period, and that the loss of value relevance for earnings data was greater than that for book value. The analysis provides evidence that the decline in value relevance of earnings and book value was driven by book values in the post-GFC period and suggests an exchange of value relevance between earning and book value post GFC. Practical implications The results are useful for regulators, analysts, investors and academics as an assessment of effectiveness of current financial reporting. There is a need for improvement because quality information helps equity holders determine value precisely. Timely financial reporting may mitigate the drop in value relevance of financial statements. Originality/value This is the first study to examine value relevance accounting measures of Kuwaiti companies, in the post-GFC context. It contributes to capital market research through an empirical examination of a frontier capital market.

Evaluation of the Possibilities of Using the Knowledge Capital Earnings Method (KCETM) for Depicting Intellectual Capital in the Annual Reports of Polish Companies

Intellectual capital is not sufficiently depicted in the annual reports of Polish companies, although it plays an important role in the operation and market valuation of enterprises. The aim of the paper is to evaluate the possibilities of using the KCETM method for depicting intellectual capital in the enterprise annual report – in particular, in the integrated reports. The KCE method developed by Lev has been modified in the area of normalized revenues, of which the evaluation method is not controlled by the audit, which results in its subjectivity. We adopted the category of gross profit generated by an enterprise from sales (including a large share of costs of earnings) which is reported by the enterprise. On the basis of the financial data from annual reports, we conducted the Knowledge Capital Earnings measurement of selected IT companies and this method was evaluated by comparing the results with the market and financials indicators of the companies and their Market-to-Book Values.The conclusions from the analysis confirmed a strong correlation of intellectual capital (evaluated by modified KCETM method) with market indicators and return on equity. The method of intellectual capital evaluation of Market-to-Book Value did not give results related to market and financial indicators.Therefore, based on the reported gross profit on sales, the KCETM method should be recommended as a measure in the integrated reporting of an enterprise.