The Effect of Separation Sustainable and Unsustainable Components of Earning in Conservative & UnConservative Companies on Value Relevance of Accounting Information

Authors

1 Assistant Professor, Department of Accounting, School of Administrative Sciences and Management, Isfahan University

2 Graduate Student of Accounting, Higher Education Institute of Sobh Sadegh

Abstract

The aim of study is to study the effect of separating stable and unstable components of Earnings in conservative and unconservative companies on value relevance of accounting information. To perform this research, information of 130 companies listed in the Tehran Stock Exchange in a six-year period from 2007-2012 was used. To measure conservatism ,the time asymmetry criterion in identifying profit and loss and to measure relevance of accounting information to share value, the share price criterion was used. Results of research indicate that separating stable and unstable components of profit in conservative companies o not provide significant difference in value relevance of accounting information but this relationship is significant in non-conservative companies.

Keywords

Journal of Accounting and Social Interests
Volume 4, Issue 3 - Serial Number 14
October 2014
Pages 121-138

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History

  • Receive Date: 30 July 2014
  • Revise Date: 14 June 2018
  • Accept Date: 08 March 2015

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