Abstract

After IFRS was adopted in 2011 in Korea, lots of interest in the value relevance of accountinginformation have been increasing. There has been no consensus on the improvement of valuerelevance of accounting information after the adoption of IFRS in Korea as well as in othercountries. Although some studies supports the enhancement of value relevance, some do not findthe improvement. This study tries to raise another empirical results on the value relevance afterIFRS using the extensive sample firms for 4 years including the before－and－after IFRSadoption. Accounting information used in the research is net book value, net income, operationincome and other comprehensive income. All accounting information except for ‘other comprehensive income’ are value relevant not onlyin separate financial statements but in consolidated financial statements. However the improvementof the value relevance of net book value does not fully confirmed after IFRS was adopted. Interestingly, operation income is on no condition weekly relevant with the market value of thefirms in comparison to net income. It means that using the operation income when doing thevaluation of business may be concerned instead of net income. In addition, the value relevance ofnet book value in KOSPI market is not improved after IFRS adoption but strongly enhanced inKOSDAQ market which means that the role of net asset value is reinforced after IFRS adoptionin KOSDAQ market.

Keywords

• IFRS
• Accounting information
• Value Relevance
• Consolidated Financial Statements

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