IFRS Non‐GAAP Earnings Disclosures and Fair Value Measurement

39 Pages Posted: 3 Mar 2016

See all articles by Lance Malone

Lance Malone

Commonwealth Bank of Australia

Ann Tarca

University of Western Australia

Marvin Wee

Australian National University (ANU); Financial Research Network (FIRN)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2016

Abstract

We investigate IFRS non‐GAAP earnings adjustments for fair value remeasurements made by companies and analysts and the usefulness of these disclosures for analysts. Examining Australian listed (ASX 200) companies during 2008–2010 (576 firm‐years), we find that companies disclosing non‐GAAP earnings are more likely to have a higher incidence and magnitude of profit or loss items reflecting asset remeasurements and impairment in their financial statements. We find non‐GAAP disclosing companies are more likely to have analyst adjustments to earnings for these items and lower forecast error and dispersion in the following year, suggesting usefulness rather than opportunism in the adjustments.

Keywords: IFRS, Non‐GAAP, Fair value measurement, Analyst forecasts

Suggested Citation

Malone, Lance and Tarca, Ann and Wee, Marvin and Wee, Marvin, IFRS Non‐GAAP Earnings Disclosures and Fair Value Measurement (March 2016). Accounting & Finance, Vol. 56, Issue 1, pp. 59-97, 2016, Available at SSRN: https://ssrn.com/abstract=2741362 or http://dx.doi.org/10.1111/acfi.12204

Lance Malone (Contact Author)

Commonwealth Bank of Australia ( email )

48 Martin Place
Melbourne
Australia

Ann Tarca

University of Western Australia ( email )

Business School
35 Stirling Highway
Crawley WA 6009
Australia
+61 8 6488 3868 (Phone)
+61 8 6488 1047 (Fax)

Marvin Wee

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Australian National University (ANU) ( email )

The Australian National University
College of Business and Economics
Canberra, 2601
Australia
+61 2 61250416 (Phone)

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