Retracted: The Value‐relevance of Equity Accounted Carrying Amounts and Disclosed Fair Values of Listed Associates

Badenhorst, Wessel; Brümmer, Leon M.; Wet, Johannes H.vH. de

doi:10.1111/auar.12089

Cited by 4 publications

(3 citation statements)

References 21 publications

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“…The model used in this study is similar to those utilised in previous value-relevance studies (Graham, Lefonawicz & Petroni, 2003;O'Hanlon & Taylor, 2007) and bears a close relationship to that of previous papers investigating investments in associates (Badenhorst, Brümmer & de Wet, 2015;Barth & Clinch, 1998). Specifically, the model is a simplified Ohlson (1995) model, which relates market value of equity to the book value of equity and net income of the firm 2 .…”

Section: Methodsmentioning

confidence: 92%

The value-relevance of listed associates: a cross-country investigation

Badenhorst

Brümmer

Wet

2015

South African Journal of Accounting Research

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Prior research findings are not conclusive on whether or not equity accounted carrying amounts and disclosed fair values of listed associates are value-relevant in different countries. Using a variety of statistical methods, this study compares the value-relevance of disclosed fair values of listed associates in South Africa, the United Kingdom and Australia. It finds that value-relevance differs between sample countries, especially when firms in the globalised financial services and mining industries are excluded from the sample, despite increased convergence in accounting standards. This study contributes to the existing literature by directly comparing the cross-country value-relevance of disclosed fair values of listed associates. Findings highlight that generalisation of value-relevance findings across countries and industries should be done with caution.

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Section: Methodsmentioning

confidence: 92%

The value-relevance of listed associates: a cross-country investigation

Badenhorst

Brümmer

Wet

2015

South African Journal of Accounting Research

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“…However, Badenhorst et al (2015) suggest that investors use disclosed accounting information of listed associates to develop their own intrinsic valuation for these investments, instead of using disclosed fair values. By contrast, Badenhorst et al (2016) conclude that fair values as well as equity accounted carrying amounts are utilised by investors. It may be that investors use both sets of information.…”

Section: The Theory Behind Decision-useful Fair Value Measurementsmentioning

confidence: 77%

“…By contrast, Badenhorst et al. (2016) conclude that fair values as well as equity accounted carrying amounts are utilised by investors. It may be that investors use both sets of information.…”

Section: Cash Flow and Earnings Analysesmentioning

confidence: 94%

The Value‐relevance of Fair Value Measurement for Inventories

Badenhorst

Well

2022

Australian Accounting Review

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The objective of this paper is to determine if fair value measurement for inventories is value-relevant. Inventories are measured at historical cost and investors will have to estimate the fair value for themselves. For a sample of firms listed in the UK and reporting from 2009 to 2018, multivariate regression results show that the historical cost component of inventories on the balance sheet is value-relevant, but that the fair value component is not. By contrast, both historical cost earnings and changes in the fair value of inventories are value-relevant. Results therefore imply that investors need both historical cost earnings and fair value movements to make decisions. By extension, fair value measurements complement, rather than replace, historical cost information.

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