The value-relevance of fair value measurement for inventories
Item
-
Title
-
The value-relevance of fair value measurement for inventories
-
Description
-
DATA AVAILABILTY STATEMENT : The data that support the findings of this study are available from Refinitiv. Restrictions apply to the availability of these data, which were used under licence for this study. The existence of the data that support the findings of this study can be verified at https://doi.org/10.25403/UPresearchdata.19845619. However, the underlying data are only available from the authors with the permission of Refinitiv.
-
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.
-
https://onlinelibrary.wiley.com/journal/18352561
-
hj2023
-
Accounting
-
Creator
-
Badenhorst, Wessel M.
-
Von Well, Rieka
-
Date
-
2023-02-24T07:19:06Z
-
2023-02-24T07:19:06Z
-
2023-06
-
Type
-
Article
-
Format
-
application/pdf
-
application/pdf
-
Identifier
-
Badenhorst, W.M. & Von Well, R. 2023, 'The value-relevance of fair value measurement for inventories', Australian Accounting Review, vol. 33, no. 2, pp. 135-159, doi : 10.1111/auar.12382.
-
1035-6908 (print)
-
1835-2561 (online)
-
10.1111/auar.12382
-
https://repository.up.ac.za/handle/2263/89807
-
Language
-
en
-
Rights
-
© 2022 The Authors. Australian Accounting Review published by John Wiley & Sons Australia, Ltd on behalf of CPA Australia. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License.