The Effect of the IFRS on Intercompany Transactions. The Case of the Greek Food-Beverage Sector

Procedia Technology /Elsevier (2013)

10 Pages Posted: 8 Jan 2014

See all articles by Athanasios Vazakidis

Athanasios Vazakidis

University of Macedonia

Stavropoulos Antonios

University of Macedonia

Ioannis Samaras

University of Macedonia

Athianos Stergios

Technological Education Institute (TEI) of Central Macedonia

Date Written: December 1, 2013

Abstract

The present study examines the value relevance of disclosed related party transactions (RPTs) in group of companies at the Greek food-beverage sector. We are based on two types of transactions, exchange of goods-products and exchange of assets, using a value relevance approach. We apply the model of Ohlson(1995) for the period 2003-2012 and we observe that the reported earnings of firms selling goods or assets to related parties exhibit a lower valuation coefficient than those of firms in Greece without such transactions. This result is not observed after 2005, when a new fair value measurement rule for related party transactions came into effect. Our evidence suggests that the new RPT regulation in Greece is perceived to be effective at reducing the potential misuse of RPTs for earnings management purposes. Since RPTs have been the subject of numerous scandals, our evidence from the Greek stock markets suggests that new RPT accounting standards could prove an effective solution to this issue.

Keywords: IFRS, related party transactions, food-beverage sector, Athens Stock Exchange

Suggested Citation

Vazakidis, Athanasios and Antonios, Stavropoulos and Samaras, Ioannis and Stergios, Athianos, The Effect of the IFRS on Intercompany Transactions. The Case of the Greek Food-Beverage Sector (December 1, 2013). Procedia Technology /Elsevier (2013). Available at SSRN: https://ssrn.com/abstract=2376121

Athanasios Vazakidis

University of Macedonia ( email )

156 Egnatia St.
P.O. 1591
Thessaloniki, 54006
Greece

Stavropoulos Antonios

University of Macedonia ( email )

156 Egnatia St.
P.O. 1591
Thessaloniki, 54006
Greece

Ioannis Samaras

University of Macedonia ( email )

156 Egnatia St.
P.O. 1591
Thessaloniki, 54006
Greece

Athianos Stergios (Contact Author)

Technological Education Institute (TEI) of Central Macedonia ( email )

TEI of Serres, Terma Magnesias
Serres, 62124
Greece

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