IFRS adoption on value-relevance and risk-relevance of accounting information among indonesian banks

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Abstract

In 2010, Indonesian banks implemented International Financial Accounting Standards (IFRS) for reporting information about financial instruments. The adoption is hypothesized to make risks more transparent. Its effect on the relevance of accounting information reported by publically traded Indonesian banks from 2007-2013 was investigated. Contrary to our expectations, value-relevance and risk-relevance of accounting information declined after the adoption of IFRS. Findings suggest that IFRS exerts a lesser influence on the relevance of accounting information in developing countries with smaller, less liquid, and weakly enforced capital markets.

Original languageEnglish
Pages (from-to)515-532
Number of pages18
JournalPertanika Journal of Social Sciences and Humanities
Volume28
Issue number1
Publication statusPublished - 19 Mar 2020

Keywords

  • Accounting information quality
  • Financial instruments
  • IAS 32
  • IAS 39
  • IFRS 7
  • Risk relevance
  • Value relevance

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