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IFRS non‐ GAAP earnings disclosures and fair value measurement
Author(s) -
Malone Lance,
Tarca Ann,
Wee Marvin
Publication year - 2016
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12204
Subject(s) - accounting , business , earnings , opportunism , fair value , asset (computer security) , profit (economics) , economics , market economy , computer security , computer science , microeconomics
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.