Abstract:
BACKGROUND : This study tests the value relevance of interim accounting information. The
study also explores whether the value relevance of annual and interim financial statements has
changed over time.
AIM : It explores whether the value relevance of interim financial statements is higher than the
value relevance of annual financial statements. Finally, it investigates whether accounting
information published in interim and annual financial statements has incremental value
relevance.
SETTING : Data for the period from 1999 to 2012 were collected from a sample of non-financial
companies listed on the Johannesburg Stock Exchange.
METHOD : The Ohlson model to investigate the value relevance of accounting information was
used for the study.
RESULTS : The results show that interim book value of equity is value relevant while interim
earnings are not. Interim financial statements appear to have higher value relevance than
annual financial statements. The value relevance of interim and annual accounting information
has remained fairly constant over the sample period. Incremental comparisons provide
evidence that additional book value of equity and earnings that accrue to a company between
interim and annual reporting dates are value relevant.
CONCLUSION : The study was conducted over a long sample period (1999–2012), in an era when
a technology-driven economy and more timely reporting media could have had an effect on
the value relevance of published accounting information. To the best of our knowledge, this is
the first study to evaluate and compare the value relevance of published interim and annual
financial statements.
