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The Combined Effects of Financial Derivatives and Discretionary Accruals on the Value Relevance of Earnings and the Book Value of Equity

Gadjah Mada International Journal of Business

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Field Value
 
Title The Combined Effects of Financial Derivatives and Discretionary Accruals on the Value Relevance of Earnings and the Book Value of Equity
 
Creator Murwaningsari, Etty
Utama, Sidharta
Rossieta, Hilda
 
Subject —
G10, G30
 
Description This study aimed to understand (1) the association between the use of discretionary accruals and financial derivatives, taking into consideration the implementation of revised PSAK 55 (1999), which was adopted from SFAS 133; (2) the combined effects of derivatives and discretionary accruals on the value relevance of earnings and equity. The analysis used panel data regressions and the Wald test over the period from 2001-2008. The results showed a positive or complementary association between derivatives and discretionary accruals. The positive association implied that managers tended to intensify the use of discretionary accruals to offset a higher use of derivatives. Price and return models demonstrated negative significant effects of derivatives on the value relevance of earnings. The return model showed negative significant effects of discretionary accruals on the value relevance of earnings but negative effects on the value relevance of equity with the price model.
 
Publisher Master of Management, Faculty of Economics and Business, Universitas Gadjah Mada
 
Contributor —
 
Date 2015-08-20
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://journal.ugm.ac.id/gamaijb/article/view/6909
10.22146/gamaijb.6909
 
Source Gadjah Mada International Journal of Business; Vol 17, No 2 (2015): May-August; 179-198
2338-7238
1411-1128
 
Language eng
 
Relation https://journal.ugm.ac.id/gamaijb/article/view/6909/5394