Clacher, I, de Ricquebourg, AD and Hodgson, A (2013) The value relevance of direct cash flows under international financial reporting standards. Abacus, 49 (3). 367 - 395. ISSN 1467-6281
Abstract
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.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2013 The Authors. Abacus published by Wiley Publishing Asia Pty Ltd on behalf of Accounting Foundation, The University of Sydney. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Cash flows and International Financial Reporting Standards; direct cash flow method; IFRS cash flow value relevance |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 20 Oct 2014 14:03 |
Last Modified: | 20 Oct 2014 14:03 |
Published Version: | http://dx.doi.org/10.1111/abac.12010 |
Status: | Published |
Publisher: | Wiley |
Identification Number: | 10.1111/abac.12010 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:77634 |