Value relevance of accounting information in the pre- and post-IFRS accounting periods

Abstract

This paper examines the value relevance of accounting information in the pre- and post-periods of International Financial Reporting Standards implementation using the models of Easton and Harris (1991) and Feltham and Ohlson (1995) for a sample of Greek companies. The results of the paper indicate that the effects of the IFRS reduced the incremental information content of book values of equity for stock prices. However, earnings’ incremental information content increased for the post-IFRS period. The results can be explained by the introduction of the fair value principle under the IFRS that brought major changes in book value but not in earnings.