Abstract

Financial statement information that make the users to evaluate their decisions is value relevant. This paper aims to determine the value relevance of financial statement information in Turkish stock markets during the period of 1997-2011 by Ohlson Model (1995) and separate regressions. Starting from 2003, new regulations about financial reporting standards became effective. Consolidation and inflation accounting were put into action in 2003 annual financial statements. Afterwards in 2005, the revised translation of International Financial Reporting Standards (IFRS) was applied. And finally in 2008, one by one translation of IFRS named as Turkish Financial Reporting Standards (TFRS) became effective. So, we also aim to test whether the acceptance of new financial reporting standards made improvements on value relevance of accounting information or not in Turkish stock markets. Our results reveal that earnings and book values both together and separately are significantly value relevant. The explanatory power of book values are higher than the explanatory power of earnings. After new reporting standards, there is an increase in the value relevance of earnings and book values together and this increase is mainly due to the increase in the value relevance of book values.

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