African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4194

Full Length Research Paper

Value relevance of financial assets’ fair values: Evidence from Chinese listed companies

Xiaoqing Zeng1*, Xicai Guo2, Chang-Tyan Yang³ and Yuxuan Xiong1
1School of Accounting, Zhongnan University of Economics and Law, Wuhan, 430073 China. 2Business School, East China University of Political Science and Law, Shanghai, 200042 China. 3Department of Accounting, National Changhua University of Education, Changhua (Taiwan), 50074 China.
Email: [email protected]

  •  Accepted: 27 May 2011
  •  Published: 28 March 2012

Abstract

The primary objective of this paper is to examine the value-relevance of financial assets’ fair values using data from all A-share listed companies in non-financial industries during 2004 to 2009 in China under IFRS-based new China Accounting Standards (CAS). We find that value-relevance of financial instruments is improved following the implementation of the fair value accounting standards, as predicted. Specifically, the change in fair values of financial assets held for trading, financial assets available-for-sale, or the sum of the two financial assets have incremental explanatory power over stock returns to their historical costs.

 

Key words: Fair value, financial instrument, value-relevance, IFRS-based China Accounting Standards (CAS).

Copyright © 2024 Author(s) retain the copyright of this article.

This article is published under the terms of the Creative Commons Attribution License 4.0

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