Quotation Hörmanseder, Stéphanie, Schiebel, Alexander. 2010. Was the IFRS Adoption in Germany Value Relevant?.


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Abstract

This paper compares the value relevance of German GAAP and IFRS. Our sample of 280 companies covers voluntary and mandatory adopters from 1998 onwards. This sample-size is unique for the Ger-man setting. The overall results are consistent with the picture of stakeholder-oriented GAAP being heavily influenced by the IFRS adoption. We document a higher value relevance of IFRS and a more pronounced conservatism under German GAAP. Our evidence suggests that the market pays more attention to income restatements than to equity restatements. Especially, the IASs 12, 16 and 32 as well as 39 are value relevant when restating equity. We find that the capital market effects are most pronounced for voluntary IFRS adopters. The majority of mandatory adopters lose with the IFRS adoption proxied by a negative income restatement. The restatements of these firms are under-weighed by the market. The results are robust against loss companies, Neuer Markt specifics and industry-fixed effects.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Was the IFRS Adoption in Germany Value Relevant?
Year 2010

Associations

People
Mittelbach-Hörmanseder, Stéphanie (Details)
Schiebel, Alexander (Details)
Organization
Financial Accounting and Auditing Group AB (Details)
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