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 journalArticle

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

Fingerprint

Book value
Accounting information
Mergers and acquisitions
Value relevance
Investors
Balance sheet
Goodwill
Sources of information
Intangible assets

All Science Journal Classification (ASJC) codes

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

Cite this

@article{1deef9ad1b4841758d29e972dc49847d,
title = "The change in the value relevance of accounting information after mergers and acquisitions: evidence from the adoption of SFAS 141(R)",
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.",
author = "Kwon, {Shin Hyoung} and Guannan Wang",
year = "2018",
month = "1",
day = "1",
doi = "10.1111/acfi.12411",
language = "English (US)",
journal = "Accounting and Finance",
issn = "0810-5391",
publisher = "Wiley-Blackwell",

}

The change in the value relevance of accounting information after mergers and acquisitions : evidence from the adoption of SFAS 141(R). / Kwon, Shin Hyoung; Wang, Guannan.

In: Accounting and Finance, 01.01.2018.

Research output: Contribution to journalArticle

TY - JOUR

T1 - The change in the value relevance of accounting information after mergers and acquisitions

T2 - evidence from the adoption of SFAS 141(R)

AU - Kwon, Shin Hyoung

AU - Wang, Guannan

PY - 2018/1/1

Y1 - 2018/1/1

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=85055576912&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85055576912&partnerID=8YFLogxK

U2 - 10.1111/acfi.12411

DO - 10.1111/acfi.12411

M3 - Article

AN - SCOPUS:85055576912

JO - Accounting and Finance

JF - Accounting and Finance

SN - 0810-5391

ER -