Reexamining the Effect of SFAS No34 on the value Relevance of Financial Statement

• Main Authors: Wen-Liong,Sue, 蘇文良
• Other Authors: Hung-shu,Fan
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/86257153067321340942

碩士 === 輔仁大學 === 會計學系碩士班 === 97 === In the past, accounting for Financial Instruments is based on historical cost and ignores the current change in fair value which causes off-balance-sheet risk and induces investors’ wrong investment decisions. However, the adoption of Fair Value Accounting in SFAS No.34 enhances the value relevance of book value of the assets and liabilities. The goal of this research is to reexamine the effect of the adoption of SFAS No.34 on the value relevance of book value and earnings. This research’s empirical sample consists of 3,487 observations during 2005~2007 in Taiwan. Following Barth, Beaver and Landsman (1998), this study adopts the Ohlson (1995) model to test the research hypotheses. The empirical results of this study are summarized as follows： 1. Before and after the adoption of SFAS No.34, earnings Information and book value information are value relevant in investors’ investment decisions. 2. After the adoption of SFAS No.34, the value relevance of book value information is significantly increased and the value relevance of earnings information is significantly decreased.