The Effect of Derivatives Usage on the Relative Value-relevance of Accounting Numbers

• Main Authors: Hsiu-Chien Lin, 林秀謙
• Other Authors: Ching-Lung Chen
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/18241690700298806333

碩士 === 雲林科技大學 === 會計系研究所 === 99 === The ongoing growth in use of financial instruments together with the accompanying disclosure requirements debate has motivated this study to examine the role of derivatives usage on the value-relevance of accounting numbers. Especially, this study divides the entire sample into hedging- versus non-hedging-purposes derivatives usage sub-sample and examines whether various derivative usage motives trigger distinct effects on value-relevance of earnings and equity book value. The empirical results reveal that, as conjectured, firms with large magnitude of hedging-purpose derivatives usage have higher value-relevance of earnings and equity book value. On the other coin, firms with large magnitude of non-hedging-purpose derivatives usage have lower value-relevance of earnings and equity book value. This study implements several diagnostic checks and demonstrates the empirical results are robust to various specifications.