Research Article


DOI :10.26650/MED.663174   IUP :10.26650/MED.663174    Full Text (PDF)

The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50)

Alper OflasMohammad Reza Toutounchi Asl

Since the beginning of 21st Century, financial reporting has served as the most authoritative criteria of International Financial Reporting Standards (IFRS). The implementation process requires improvement in the quality and comparability of financial reporting and impacts stock value and investors’ decisions. The aim of this study is to determine the statistical power of changes in stock market prices due to the adoption and implementation of IFRS. In this study, book value and earnings per share are defined as independent variables and market value per share is the dependent variable. The statistical subjects of the study included all nonfinancial companies that have been traded in Borsa Istanbul. As the sample set, the research presents a 19-year (2000–2018) review of 24 companies in BIST 50, that are active during the study. Accordingly, data are collected annually (cross-sectional data) and a Least Squares Regression method is applied for analysis. The results reveal that the approval, publication, and implementation of accounting and financial reporting standards increase the relationship between the variables of study and regression increases directly from (0.4713) to (0.8740) from 2005 to 2018.

DOI :10.26650/MED.663174   IUP :10.26650/MED.663174    Full Text (PDF)

UFRS Uygulanma Sürecinde Hisse Senedi Piyasa Değeri İle Hisse Başına Kazanç ve Hisse Senedi Defter Değeri Arasındaki İlişki (BİST 50’ye Dayalı Bir Uygulama)

Alper OflasMohammad Reza Toutounchi Asl

21. Yüzyılın başından beri finansal raporlamanın en önemli kriteri Uluslararası Finansal Raporlama Standartlarıdır (UFRS). Bu sürecin uygulanması; finansal raporlamanın kalitesini ve karşılaştırılabilirliğini arttırarak, hisse senetlerin değerlerini ve ardından yatırımcıların kararlarını etkilemektedir. Bu araştırmanın amacı UFRS’lerin kabul ve uygulanma etkisinin hisse senedinin piyasa fiyatında yarattığı değişikliklerin istatistiksel gücünü açıklamaktır. Bu araştırmada hisse senedinin defter değeri ve hisse başına kazanç bağımsız değişken ve hisse senedi fiyatı bağımlı değişken olarak tanımlanmaktadır. Ayrıca istatistik ana kütlesi Borsa İstanbul’da (BİST) işlem gören ve mali olmayan şirketleri kapsamaktadır. Araştırmanın analiz dönemi 19 yıllık (2000- 2018) bir inceleme ve aktif olan BİST 50’deki şirketler örneklem kümesi olarak listelenmektedir. Bu doğrultuda, araştırma verileri yıllık olarak (Kesit Veri) toplanıp analize hazırlanmakta ve tümü için en küçük kareler regresyon yöntemi kullanılmaktadır. Araştırmanın analiz döneminde sonuçlar, muhasebe standartlarının ve finansal raporlama standartlarının onaylanıp yayınlanması ve uygulamaya geçmesi araştırmanın değişkenleri arasındaki ilişkinin artmasını ve regresyonun 2005’ten 2018’e kadar (0.4713) rakamından (0.8740) rakamına doğrudan artmasını göstermektedir. 


EXTENDED ABSTRACT


Regarding stock valuation, the most accepted approach in theory is the “Dividend’” approach. Additionally, price/earnings ratio and market value/book value ratio approaches are also used. Book value per share and earnings per share are widely used in stock valuation (Aktaş, 2008). Consequently, when endeavoring to make financial decisions, the information produced in enterprises’ accounting information systems must be high quality. With “Qualitative Features of Financial Statements” within the conceptual framework of financial reporting provided by the International Accounting Standards Board, we obtain quality data from the accounting information system. International Financial Reporting Standards (IFRS) make it possible to produce comparable financial statements worldwide. Turkey also adopted these amended and updated international reporting standards. This study examines the effect of the acceptance, publication, and enforcement of IFRS in Turkey on the relationship between market value per share, earnings per share, and stock book value, and whether its intended affects are also applicable in Turkey, based on the results of this analysis.

According to Kaya and Utku’s (2019) study on developments in the process of adopting IFRS in Turkey, until 2005 oversight was provided by a Board that was founded in 1994. The aim of this study is to examine the effects of changes to the public reporting of companies’ financial performance in transitioning to IFRS in 2005 at 12 different financial rates. The result demonstrates significant differences in long-term financial ratios in Turkey, particularly when the IFRS transition was observed. Çürük and Tanyeri (2018) investigated the impact of the transition to consolidation based on companies traded on the stock market in Turkey. In order to investigate whether the tables issued according to IFRS 10 had any effect on the companies’ return, the relationship between the stock return and financial rates was tested using a regression analysis. According to the results, the transition to consolidation is critical, and significant changes have occurred at the level of companies’ explanation of return on financial rates following consolidation.

Sultanoğlu (2014) carried out an empirical study on the suitability of financial information presented in the financial statements prepared by businesses traded in Borsa Istanbul in Turkey since 2005 using a panel regression analysis. According to the results, a significant increase in the suitability of financial information to the needs following the implementation of IFRS was demonstrated. Moreover, Return Model analysis results found that an upward change in the net profit value was reflected in the stock return after the transition to IFRS. Şen and Terzi (2013) examined the work of local accounting regulations, International Accounting Standards, and IFRS to investigate the impact of the transition on equity. The analysis determined that the transition to IAS/IFRS had statistically significant effects on the equity items.

Research information is provided via the second source scanning method. To test the research hypothesis, a multivariate regression model is applied using section data. Data were obtained by referring to the financial statements of companies that were accepted and traded in Borsa Istanbul. The financial statements of the selected companies from 2000 to 2018 are analyzed covering 19 years. Analyses of the resulting financial statements are calculated using Microsoft Excel 2016 software. The main subjects of the study are the BIST 50, which was accepted and traded on Borsa Istanbul. Of these 50 companies, 26 were excluded from the analysis for various reasons, leaving a final number of 24 companies included in the research over a 19-year period (456 company-years).

The dependent variable of this study is market value per share and the independent variables are earnings per share and book value per share. Accordingly, a regression model is provided to test the research hypothesis. In this model, the multivariate regression (Multiple R) measures the relationship between variables, the coefficient (R2 ) and the adjusted coefficient determination (Adj. R2 ) measure the power of the independent variables in explaining the dependent variable. The approval and publication of accounting standards and financial reporting standards within the timeframe of the study were examined and their application was revealed to be correlated with an increase in the relationship between the variables of the research. According to the multivariate regression graph of statistical data resulting from the analysis, there were three peaks: in 2007 (0.5912), 2012 (0.8414), and 2018 (0.8740). The main sources for these three peaks are TFRS 7 with TFRS 7 for 2007; TFRS 10 for 2012; and TFRS 12, TMS 27, TMS 28, TFRS 9, TFRS 15, and TFRS 16 come into force in 2018. Coefficient and adjusted coefficient of determination increased directly from 2005 to 2018 (0.4713–0.8740). This result can be attributed to the establishment of Turkey’s Public Oversight Accounting and Auditing Standards Authority, which provided a valuable focus for investors resulting from the availability of high-quality reports. IFRS are approved, published, and implemented step-by-step; in other words, standards’ implementation of the companies in countries trading on the stock exchange results in improving the quality of financial statements. For this reason, the research results support other studies that have been done before (Wulandari and Rahman, 2004; Callao, 2007; Clarksonve ark., 2011; Çürük and Tanyeri, 2018; Key and Kim, 2020; Kandimov, 2020).


PDF View

References

  • Acaravcı, K.S. (2016). Finansal oranlar ve hisse senedi getirisi ilişkisi: Borsa İstanbul üzerine bir uygulama. Mustafa Kemal Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 13(5), 263–275. google scholar
  • Aktaş, M. (2008). Hisse senedi seçimi ve hisse senedi seçiminde etkili olan finansal oranların belirlenmesine yönelik İMKB şirketleri üzerinde bir uygulama. İstanbul Üniversitesi, Sosyal Bilimler Enstitüsü, Doktora Tezi, İstanbul. google scholar
  • Alkan, B.Ş. (2019). Türkiye muhasebe ve raporlama standartlarının finansal analize etkisi. The Journal of Social Science, 5, 61–79. google scholar
  • Aysan, M. (2008). Uluslararası finansal raporlama standartlarına ulusal uyum: Türkiye örneği. Erişim adresi http://journal.mufad.org.tr/attachments/article/272/4.pdf google scholar
  • Bartov, S., Goldberg, R. ve Kim, M. (2002). Comparative value relevance among German, US and ınternational accounting standards: A german stock market perspective. Journal of Accounting Auditing and Finance, 20(2), 95–119. google scholar
  • Beisland, L.A. ve Knivsfla, K.H. (2009). Have IFRS changed how investors respond to earnings and book values? Retrieved from http://ssrn.com/abstract=1334533. google scholar
  • Callao, S., Jarne, J. ve Lainez, J. (2007). Adoption of IFRS in Spain: Effect on the comparability and relevance of financial Reporting. Journal of International Accounting, Auditing and Taxation, 16(2), 148–178. google scholar
  • Clarkson, P., Hanna, J.D., Richardson, G.D. ve Thompson, R. (2011). The impact of IFRS adoption on the value relevance of book value and earnings. Journal of Contemporary Accounting and Economics, 7, 1–17. google scholar
  • Çukacı, Y.C. (2005). Ekonomik değer olarak bilginin muhasebe, işletmeler ve genel ekonomi açısından değerlendirilmesi. Doğu Anadolu Bölgesi Araştırmaları, 11–19. google scholar
  • Çürük, T. ve Tanyeri, A. (2018). Uluslararası finansal raporlama standartları 10 kapsamında konsolidasyona geçişin firmaların hisse senedi getirisi üzerindeki etkisi. Muhasebe ve Finansman Dergisi, 77, 45–54. google scholar
  • Gaston, S.C., Garcia, C.F., Jarne, J.I.J. ve Gadea, J.I.L. (2010). IFRS adoption in Spain and the United Kingdom: effects on accounting numbers and relevance. Advances in Accounting: Incorporating Advances in International Accounting, 26(2), 304–313. google scholar
  • Güvemli, O. ve Güvemli, B. (2015). Türk ticaret kanunlarının Türk muhasebe düşüncesinin gelişmesindeki etkileri. Muhasebe ve Finans Tarihi Araştırmaları Dergisi, 8, 26–50. google scholar
  • İbiş, C. ve Özkan S. (2006). Uluslararası finansal raporlama standartlarına (UFRS) genel bakış. Mali Çözüm Dergisi, 74 (1), 25–43. google scholar
  • Kadri, M.H., Aziz, R.A. ve Mohamed, K.I. (2009). Value relevance of book value and earnings: Evidence from two different financial reporting regimes. Journal of Financial Reporting and Accounting, 7(1), 1–16. google scholar
  • Kandimov, S. (2020). The impact of IFRS adaption on the financial ratios of Norwegian public listed companies. Universıty of Oulu, Oulu Business School, Master’s Thesis, Finland. google scholar
  • Karapınar, A. (2000). Uluslararası muhasebe standartlarında şirket karı üzerine etki eden alternatif. Sosyal Bilimler Enstitüsü, Muhasebe Finansman Bilim Dalı, Doktora Tezi, Ankara. google scholar
  • Kaya, Y. ve Utku, M. (2019). UFRS’nin Türkiye’deki gelişimi ve UFRS’ye geçişin şirketlerin finansal performansları üzerindeki etkileri. 38. Türkiye Muhasebe Eğitim Sempozyumu, 27–42. google scholar
  • Key, K.G. ve Kim, J.Y. (2020). IFRS and accounting quality: Additional evidence from Korea. Journal of International Accounting, Auditing and Taxation, 39, 32–45. google scholar
  • Kouser, R. (2011). Relationship of share price with earnings and book value of equity: paramount impact of IFRS adoption in Pakistan.Economic and Finance Review, 1(8), 84–92. google scholar
  • Sultanoğlu, B. (2014). UFRS’nin Borsa İstanbul’daki şirketlerin finansal tabloları üzerindeki etkisi: Finansal bilginin ihtiyaca uygunluğu ve finansal tablolar analizi. Başkent Üniversitesi, Sosyal Bilimler Enstitüsü, Muhasebe Finansman Bilim Dalı, Doktora Tezi, Ankara. google scholar
  • Şen, İ. K. ve Terzi, S. (2013). Uluslararası finansal raporlama standartlarına geçişin özkaynak üzerine etkileri: Borsa İstanbul örneği. Muhasebe Bilim Dünyası Dergisi, 4, 1–19. google scholar
  • Uyar, U. (2015). Finansal raporlama standartlarının piyasa değerini açıklama üzerine etkisi. Pamukkale Üniversitesi, Sosyal Bilimler Enstitüsü, Doktora Tezi, Denizli. google scholar
  • Wulandari, E.R. ve Rahman, A.R. (2004). Political patronage, cross-holdings and corporate governance in Indonesia. Governance of East Asian Corporations: Post-Asian Financial Crisis, Palgrave Macmillan, New York. google scholar
  • Zencirkıran, S. (2015). Uluslararası muhasebe ve denetim standartlarının ulusal düzeydeki mevzuat ile ilişkisi: Türkiye örneği. Sayıştay Dergisi, 98, 61–74. google scholar

Citations

Copy and paste a formatted citation or use one of the options to export in your chosen format


EXPORT



APA

Oflas, A., & Toutounchi Asl, M.R. (2021). The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50). Journal of Accounting Institute, 0(64), 71-84. https://doi.org/10.26650/MED.663174


AMA

Oflas A, Toutounchi Asl M R. The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50). Journal of Accounting Institute. 2021;0(64):71-84. https://doi.org/10.26650/MED.663174


ABNT

Oflas, A.; Toutounchi Asl, M.R. The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50). Journal of Accounting Institute, [Publisher Location], v. 0, n. 64, p. 71-84, 2021.


Chicago: Author-Date Style

Oflas, Alper, and Mohammad Reza Toutounchi Asl. 2021. “The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50).” Journal of Accounting Institute 0, no. 64: 71-84. https://doi.org/10.26650/MED.663174


Chicago: Humanities Style

Oflas, Alper, and Mohammad Reza Toutounchi Asl. The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50).” Journal of Accounting Institute 0, no. 64 (Jul. 2021): 71-84. https://doi.org/10.26650/MED.663174


Harvard: Australian Style

Oflas, A & Toutounchi Asl, MR 2021, 'The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50)', Journal of Accounting Institute, vol. 0, no. 64, pp. 71-84, viewed 25 Jul. 2021, https://doi.org/10.26650/MED.663174


Harvard: Author-Date Style

Oflas, A. and Toutounchi Asl, M.R. (2021) ‘The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50)’, Journal of Accounting Institute, 0(64), pp. 71-84. https://doi.org/10.26650/MED.663174 (25 Jul. 2021).


MLA

Oflas, Alper, and Mohammad Reza Toutounchi Asl. The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50).” Journal of Accounting Institute, vol. 0, no. 64, 2021, pp. 71-84. [Database Container], https://doi.org/10.26650/MED.663174


Vancouver

Oflas A, Toutounchi Asl MR. The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50). Journal of Accounting Institute [Internet]. 25 Jul. 2021 [cited 25 Jul. 2021];0(64):71-84. Available from: https://doi.org/10.26650/MED.663174 doi: 10.26650/MED.663174


ISNAD

Oflas, Alper - Toutounchi Asl, MohammadReza. The Relationship Between Market Value Per Share, Earnings Per Share and Book Value Per Share in IFRS Implementation Process (Evidence from the BIST 50)”. Journal of Accounting Institute 0/64 (Jul. 2021): 71-84. https://doi.org/10.26650/MED.663174



TIMELINE


Submitted23.12.2019
Accepted04.11.2020
Published Online31.01.2021

LICENCE


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.