The Market Valuation of IAS Versus U.S. Gaap Accounting Measures Using Form 20-F Reconciliations

Posted: 6 Apr 1998

See all articles by Mary Harris Stanford

Mary Harris Stanford

Texas Christian University - Department of Accounting

Karl A. Muller

Pennsylvania State University - Department of Accounting

Date Written: March 1998

Abstract

We investigate the market valuation of earnings and book value amounts prepared under International Accounting Standards (IAS) and U.S.-GAAP to provide evidence on the debate between the U.S. SEC and the NYSE on whether foreign firms should be allowed to list in the U.S. using IAS. Our sample consists of foreign firms that adopted IAS in their primary accounts with a reconciliation to U.S.-GAAP in their Form 20-F filing. Using both price and return valuation models, we find evidence that the U.S.-GAAP earnings reconciliation adjustment is associated with market value and stock returns after controlling for IAS amounts. In addition, we find evidence that U.S.-GAAP amounts are valued differently than IAS amounts and are more highly associated with market values and security returns than IAS amounts.

JEL Classification: M41, M45, G15

Suggested Citation

Stanford, Mary and Muller, Karl A., The Market Valuation of IAS Versus U.S. Gaap Accounting Measures Using Form 20-F Reconciliations (March 1998). Available at SSRN: https://ssrn.com/abstract=74108

Mary Stanford

Texas Christian University - Department of Accounting ( email )

M.J. Neeley School of Business
TCU Box 298530
Fort Worth, TX 76129
United States
817-257-7483 (Phone)

Karl A. Muller (Contact Author)

Pennsylvania State University - Department of Accounting ( email )

Smeal College of Business
384 Business Building
University Park, PA 16802-3306
United States
814-865-0202 (Phone)
814-863-8393 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
2,851
PlumX Metrics