The Value Relevance of Direct Cash Flows under International Financial Reporting Standards.

This study examines if there has been a change in the value relevance of direct cash flow components since the adoption of International Financial Reporting Standards ( IFRS) in Australia. Our results show that for both industrial and extractive firms direct cash flow statements are value relevant u...

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Publicado en:Abacus Vol. 49; no. 3; pp. 367 - 396
Autores principales: Clacher, Iain, Ricquebourg, Alan Duboisée, Hodgson, Allan
Formato: Artículo
Publicado: Wiley-Blackwell Sep2013
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: The Value Relevance of Direct Cash Flows under International Financial Reporting Standards.
      aug:
        au:
          Clacher, Iain
          Ricquebourg, Alan Duboisée
          Hodgson, Allan
        affil:
          Accounting and Finance Division, Leeds University Business School
          Centre for Advanced Studies in Finance, Leeds University Business School
          University of Queensland Business School, Australia
      su:
        Assets (Accounting)
        Present value
        Quick assets
        Cash flow
        International accounting standards
        Corporate finance
        Accounting
        Australia
      sug:
        subj:
          Australia
          Assets (Accounting)
          Present value
          Quick assets
          Cash flow
          International accounting standards
          Corporate finance
          Accounting
      keyword:
        Cash flows and International Financial Reporting Standards
        Direct cash flow method
        IFRS cash flow value relevance
      ab: This study examines if there has been a change in the value relevance of direct cash flow components since the adoption of International Financial Reporting Standards ( IFRS) in Australia. Our results show that for both industrial and extractive firms direct cash flow statements are value relevant under Australian Generally Accepted Accounting Principles ( AGAAP) and remain so after the adoption of IFRS. In addition, for industrial firms there is a significant increase in the value relevance of direct cash flows after IFRS, along with an increase in the value relevance of accruals. These results are consistent with the proposition that direct cash flows play a reinforcing role that complements the more complex IFRS accounts. Consequently, if the International Accounting Standards Board ( IASB) were to mandate direct cash flow statements it would, in all likelihood, provide users of accounts with a valuable incremental source of hard transaction information.
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