The Effect of No.34 on the Value Relevance of Financial Statement

• Main Authors: hui-wei Huang, 黃慧雯
• Other Authors: Po-Sheng Ko
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/97819843561818139964

碩士 === 國立高雄應用科技大學 === 商務經營研究所 === 98 === The Statement of Financial Accounting Standards No. 34 (SFAS 34) has made tremendous effect on the accounting treatments of companies, especially on the evaluation of financial instruments. SFAS 34 has changed the traditional way of Lower of Cost or Market (LCM) to a fair value evaluation. There are also some accounting principles made by SFAS 34 in regarding the rules and regulations for the financial instruments, including some major parameters such as the categorization of financial instruments, fair market value, and hedging accounting. The study is based on the 23 listed banking businesses as controlled group for research. The sampling period has set to be 15 quarters to verify the value added relativity on the assigned derivatives after SFAS 34 being put into practice. The preliminary result has shown that, in practice, the banking industry has customary purchased the financial assets in related to financial assets at fair value through income statement and financial assets in available-for-sale, which is contributed to its liquidity and marketability. The fair value measurement would also help the risk management to manage the adjustment on the profit or loss more easily. The study has proved that when putting the SFAS 34 into practice, the accounting information such as financial assets at fair value through income statement, financial assets in held-to-maturity, derivative financial assets for hedging, unrealized gain or loss on financial instrument make significant impact on company’s stock price. Also when SFAS 34 has been implemented, the new information on financial statement has provided investors more valuable clues. Despite this, the earning per share still plays an important role in the stock prices without being affected by SFAS 34.