Is the Value-Relevance of IFRS Better than GAAP?: An Empirical Study of Taiwan

This study examines the effect of net income, book value of equity, and comprehensive income on the value relevance after adopting IFRS. The empirical sample consists of companies listed in the Taiwan stock markets. The results show higher value relevance of net income and book value of equity after adopting IFRS. This study finds that the value relevance of total comprehensive income has more relative explanatory power than net income. The value relevance of components of comprehensive income has higher value relevance than total comprehensive income. In this study, the empirical sample is divided into two subsamples by stock price, and it is found that accounting information of high stock price companies has higher value relevance than low stock price companies. Finally, as a company is with the high proportion of institutional shareholders, the total comprehensive income and components of comprehensive income have higher value relevance.