|
Value relevance of disclosed fair value and hedging information in an IASB accounting regime
Pearl H N Tan,
Singapore Management University
ABSTRACT. Using a balance sheet valuation model and the valuation model from Ohlson (1995), this study examines, in the period prior to the implementation of International Accounting Standard 39 in Singapore, if disclosures of unrecognized fair value gains and losses of on-balance sheet financial assets and financial liabilities and unrecognized gains and losses of off-balance sheet derivatives are incorporated in the market’s valuation of companies’ equities. Empirical support is found for the value relevance of cumulative unrealized gains and losses of financial assets and financial liabilities but this support is not consistent across different specifications of the model. No support is found for the value relevance of derivative gains and losses in the multivariate analysis. Further, the study finds that the association between book values of equity and market values are positively enhanced in the presence of an active hedging strategy.
Full-Text is no longer available online. Please contact the author(s) for more information about this manuscript.
Back to Session Listing
|