The change in the value relevance of accounting information after mergers and acquisitions: evidence from the adoption of SFAS 141(R)

Shin Hyoung Kwon, Guannan Wang

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

This study examines how and why investors change the use of their information sources in valuation between book value and earnings after mergers and acquisitions (M&A) in both pre- and post-SFAS 141(R) periods. We find that investors generally put less weight on earnings but more weight on book value after M&A than before M&A, and that such a change is particularly strong after the adoption of SFAS 141(R). By looking at goodwill, other intangible assets and other balance sheet accounts that SFAS 141(R) amended, we further find that SFAS 141(R) improves the value relevance of book value components after M&A.

Original languageEnglish (US)
JournalAccounting and Finance
DOIs
StateAccepted/In press - Jan 1 2018

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)

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