Revalued financial, tangible, and intangible assets: associations with share prices and non-market-based value estimates
Article Abstract:
A study examined the variability of relevance, reliability and timeliness of asset revaluations in Australia across different types of assets. This inquiry also determined if the variations exist as a result of the firm's board of directors or an independent appraiser performing the valuation. Data were collected from a sample of 350 publicly traded Australian firms between 1991 and 1995. Findings revealed that revalued financial, tangible and intangible assets are value relevant. Revalued investments were found to be linked to share prices, with the exception of investments of nonfinancial firms in related companies. Moreover, findings revealed a positive relationship between revalued intangible assets and share prices. Findings regarding revalued property, plant and equipment were less consistent.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1998
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Discussion of 'Revalued Financial, Tangible, and Intangible Assets: Association with Share Prices and Non-Market-Based Value Estimates.'
Article Abstract:
An analysis of the study conducted by Barth and Clinch (1998), which focused on the association of asset revaluation with share prices and different value metrics among Australian firms, was conducted. This paper employed price per share and a measure of intrinsic value per share as value metrics. The possible effects of scale in regressions that use price or value per share as the dependent variable may have had effects on the outcomes obtained in the study. In particular, statistical relationships between price, balance sheet data and income statement data in the regressions may be an artificial effect of scale. Therefore, interpretation of Barth and Clinch's findings should be performed carefully with consideration of the caveats generated by possible spurious effects.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1998
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Earnings as an explanatory variable for returns
Article Abstract:
A model based on the premise that owners' equity and market value are variables that reveal equity holders' wealth was used to investigate whether earnings can display explanatory power for evaluating returns. The model, after adjusting for dividends, used as flow variables market returns and beginning-of-return-period earnings divided by price. Research results revealed that the earnings divided by the price at the beginning of the period was positively correlated with stock returns.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1991
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