Record Details

Fair Value Hierarchy Measures: Post-Implementation Evidence on IFRS 7

GSTF Journal on Business Review

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Field Value
 
Title Fair Value Hierarchy Measures: Post-Implementation Evidence on IFRS 7
 
Creator Tan, Pearl
 
Subject Fair value hierarchy, IFRS 7, Disclosure, OCI
 
Description Using a balance sheet valuation model, this study examines if information on the fair value hierarchy of on-balance sheet financial assets and financial liabilities are incorporated in the market’s valuation of companies’ equities in Singapore. The results of the study show significant associations between as-reported Level 1 and Level 2 fair value measures of financial assets and market values. However, the results are not significant for Level 3 fair value measures of financial assets and each of the three levels of fair value measures of financial liabilities. The results also show that returns are more positively associated with as-reported gains and losses from Level 1 and Level 2 fair value measures than those from Level 3 fair value measures. Overall, the evidence suggests that information on the fair value hierarchy of IFRS 7 Financial Instruments: Disclosures are used by market participants in their pricing decisions. The market however appears to place greater weights on fair value changes taken to the income statement than those taken to OCI, notwithstanding the level of the fair value measure. While the fixation with income statement measures remains a puzzle, the results are consistent with prior studies that show that investors largely ignore OCI in their pricing of shares.
 
Publisher GSTF Journal on Business Review (GBR)
 
Contributor —
 
Date 2015-09-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://dl6.globalstf.org/index.php/gbr/article/view/1348
 
Source GSTF Journal on Business Review (GBR); Vol 4, No 1 (2015): Journal on Business Review
ISSN: 2251-2888
2010-4804
 
Language eng
 
Relation http://dl6.globalstf.org/index.php/gbr/article/view/1348/1362
 
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