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.
