Revalued Financial Tangible, and Intangible Assets: Associations with Share Prices and Non Market-Based Value Estimates

Journal of Accounting Research, Vol. 36, 1998

Posted: 8 Apr 1998 Last revised: 25 Dec 2010

See all articles by Mary E. Barth

Mary E. Barth

Stanford University - Graduate School of Business

Greg Clinch

Independent

Date Written: January 1, 1998

Abstract

This study investigates how Australian asset revaluations are associated with share prices and non market-based firm value estimates. We find that revalued financial, tangible, and intangible assets can be value-relevant. Although prior research presages the financial assets findings, the intangible assets findings are striking in strength and consistency. Findings for property, plant, and equipment are less consistent. Also, we find stronger value-relevance for plant and equipment than for property, suggesting revalued operating assets are more value-relevant. Perhaps surprisingly, the market does not distinguish director- and independent appraiser-based valuations, consistent with directors' enhancing value estimates by using their private information countervailing distorting effects associated with management discretion. Also, even several year old revalued amounts are value-relevant, suggesting timeliness is not critical for long-term asset revaluations. Finally, evidence indicates that investors value differently upward and downward revaluations, suggesting the discretionary nature of asset write-ups can affect value-relevance.

JEL Classification: M41, M44

Suggested Citation

Barth, Mary E. and Clinch, Greg, Revalued Financial Tangible, and Intangible Assets: Associations with Share Prices and Non Market-Based Value Estimates (January 1, 1998). Journal of Accounting Research, Vol. 36, 1998. Available at SSRN: https://ssrn.com/abstract=74569

Mary E. Barth (Contact Author)

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-9040 (Phone)
650-725-0468 (Fax)

Greg Clinch

Independent

No Address Available

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