The value-relevance of disclosed summarised financial information of listed associates
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Date
Authors
Badenhorst, Wessel M.
Brummer, Leon Marx
De Wet, Johannes H.v.H. (Johannes Hendrik van Heerden)
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Abstract
While prior research considers limited elements of the summarised financial informationreported for equity accounted associates under IAS 28, it does not address the collectiveor incremental value-relevance of these disclosures. Therefore, this study investigates theincremental value-relevance of all required elements of disclosed summarised financialinformation for listed associates, and controls for reported fair values. Findings suggestthat individual elements of these summarised disclosures are sometimes incrementallyvalue-relevant, but that elements have the greatest incremental value-relevance as a group.These findings suggest that investors value a firm’s investments in listed associates at a self-developed intrinsic value, rather than using the market value (or fair value) of that associatedirectly. Therefore, underlying accounting information of listed associates remains value-relevant, even when alternative market-based valuations are available.
Description
Keywords
Equity accounting, Investments in associates, Disclosure
Sustainable Development Goals
Citation
Badenhorst, WM, Brummer, LM & De Wet, JH 2015, 'The value-relevance of disclosed summarised financial information of listed associates', Journal of International Accounting, Auditing and Taxation, vol. 24, pp. 1-12.