With the coming of knowledge economy, intellectual capital has become the most important sources of competitiveness. Because intellectual capital lacks uniform valuation and has nonconformity with the definition of GAAP intangible assets, most intellectual capital can¡¦t be presented in financial reports. If we can consider intellectual capital in business valuation, we can assess firm¡¦s intrinsic value more exactly. So this study is based on Ohlson (1995) model to examine the value relevance of human capital (human assets), structural capital (R&D assets) and relational capital (advertising assets). The empirical evidence shows that (1) human assets, R&D assets and advertising assets have significant positive relation with market value of firms, (2) the Ohlson (1995) model including the three assets components has greater value relevance, (3) the effect of human assets, R&D assets and advertising assets on business valuation are different among industries.

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Pension funds have been part of the private sector since the 1850’s. Defined Benefit pension plans [DB], where a company promises to make regular contributions to investment accounts held for participating employees in order to pay a promised lifelong annuity, are significant capital markets participants, amounting to 2.3 trillion dollars in 2010 (Federal Reserve Board, 2013). In 2006, Statement of Financial Accounting Standards No.158 (SFAS 158), Employers’ Accounting for Defined Benefit Pension and Other Postemployment Plans, shifted information concerning funding status and pension asset/liability composition from disclosure in the footnotes to recognition in the financial statements. I add to the literature by being the first to examine the effect of recent pension reform during the financial crisis of 2008-09. This dissertation is comprised of three related essays. In my first essay, I investigate whether investors assign different pricing multiples to the various classes of pension assets when valuing firms. The pricing multiples on all classes of assets are significantly different from each other, but only investments in bonds and equities were value-relevant during the recent financial crisis. Consistent with investors viewing pension liabilities as liabilities of the firm, the pricing multiples on pension liabilities are significantly larger than those on non-pension liabilities. The only pension costs significantly associated with firm value are actual rate of return and interest expense. In my second essay, I investigate the role of accruals in predicting future cash flows, extending the Barth et al. (2001a) model of the accrual process. Using market value of equity as a proxy for cash flows, the results of this study suggest that aggregate accounting amounts mask how the components of earnings affect investors’ ability to predict future cash flows. Disaggregating pension earnings components and accruals results in an increase in predictive power. During the 2008-2009 financial crisis, however, investors placed a greater (and negative) weight on the incremental information contained in the individual components of accruals. The inferences are robust to alternative specifications of accruals. Finally, in my third essay I investigate how investors view under-funded plans. On average, investors: view deficits arising from under-funded plans as belonging to the firm; reward firms with fully or over-funded pension plans; and encourage those funds with unfunded pension plans to become funded. Investors also encourage conservative pension asset allocations to mitigate firm risk, and smaller firms are perceived as being better able to handle the risk associated with underfunded plans. During the financial crisis of 2008-2009 underfunded status had a lower negative association with market value. In all three models, there are significant differences in pre- and post- SFAS 158 periods. These results are robust to various scenarios of the timing of the financial crisis and an alternative measure of funding.

A presente pesquisa objetivou investigar a relevância das informações relacionadas às reservas provadas de petróleo e das informações contábeis (lucro e patrimônio líquido) divulgadas por empresas petrolíferas. Por meio de um estudo de value relevance aplicado ao setor petrolífero mundial, o problema de pesquisa desta tese foi traduzido na seguinte questão: qual a relevância das informações relacionadas às reservas provadas de petróleo e das informações contábeis (lucro e patrimônio líquido) divulgadas por petrolíferas integradas e listadas na Bolsa de Valores de Nova Iorque (New York Stock Exchange - NYSE), durante o período de 2001 a 2012? Para responder a essa questão e atingir o objetivo proposto, foram aplicadas regressões considerando a técnica de Dados em Painel em uma amostra composta por 15 petrolíferas, cada uma com observações para os 12 anos pesquisados, totalizando 180 empresas-ano. Foram testados 8 modelos, todos tendo como variável dependente o logaritmo neperiano ou natural (ln) do preço médio das ações, considerando os preços de fechamento dos meses de novembro, dezembro, janeiro e fevereiro. Como variáveis explicativas foram testadas o Patrimônio Líquido (PL), o Lucro Líquido (LL), os Custos Capitalizados (CC), o Volume de Reservas de Óleo e Gás (RPO&G), suas alterações e o Fluxo de Caixa Futuro Descontado (FCD) decorrente dessas reservas. Os resultados mostraram que as informações sobre o PL são mais relevantes do que as informações sobre os resultados (LL). As informações sobre os Custos Capitalizados são relevantes e com forte relação inversa (negativa) com os preços das ações. Fraca relevância das informações sobre o volume das Reservas Provadas de Petróleo e do Fluxo de Caixa Futuro Descontado relativo a essas reservas. Quando desagregados em seus componentes principais (revisões, melhorias de recuperação, descobertas, compras, vendas e produção) a informação sobre o volume das reservas ganharam relevância. Especificamente, observou-se considerável relevância das informações sobre descobertas, produção e compra de petróleo. Por fim, os resultados indicaram que o valor de mercado de uma petrolífera é função da variável contábil PL e de informações relacionadas às reservas provadas de petróleo e de gás. Esse achado reforça a ideia de que os dados contábeis são informações incompletas para a determinação do valor de uma petrolífera, sendo que as informações relacionadas às reservas provadas de petróleo e de gás contribuem incrementando a relevância das variáveis contábeis mensuradas a valores históricos. Em decorrência disso, informações adicionais em notas explicativas sobre as reservas de petróleo são relevantes e necessárias, além das tradicionais já divulgadas nas demonstrações financeiras. / This actual research investigated the relevance of information related to proven reserves of oil and accounting information (net income and book value) disclosed by oil companies. Thus, by means of a value relevance study applied to the global petroleum industry, the following question resulted from the research problem: What relevance does information related to proven reserves of oil and accounting information (net income and book value) disclosed by integrated oil companies that are listed on the stock exchange in New York (New York Stock Exchange - NYSE), during the period 2001-2012, have? To answer this question and achieve the proposed objective there were applied panel data regressions in a sample of 15 oil companies, each company with observations for 12 years, totaling 180 observations. There have been tested 8 models, each of them having as dependent variable the Naperian or natural logarithm (ln) of the average share price, considering the closing prices of November, December, January and February. As independent variables have been tested book value (PL), net income (LL), capitalized costs (CC), volume of gas and oil reserves (RPO&G), components of the change in reserve value, discounted future cash flow (FCD) of the reserves. The results revealed that the information about PL is more relevant than the information about LL. The information about the capitalized costs is relevant, with a strong inverse negative relationship with the share prices. Further, the results demonstrated a weak relevance of information on the volume of gas and oil reserves and the discounted future cash flow of the reserves. When broken down into its main components (reviews, recovery improvements, discoveries, purchases, sales and production), the information about volume of gas and oil reserves gained in relevance. Specifically, there has been observed a considerable relevance of information about discoveries, production and the purchases of oil and gas. Lastly, the results indicated that the market value of oil company is a function of PL variable and accounting information relating to proved oil and gas. These findings reinforce the idea that the accounting data are incomplete information for determining the value of an oil company, as the information related to proven reserves of oil and gas contribute to an increasing relevance of the measured accounting variables in historic values. As a result, additional information in the note about the reserves of oil is relevant and necessary, beyond the traditional remarks disclosed in the financial statements.

As instuições financeiras do Brasil que possuem Comitê de Auditoria e/ou estão listadas em Bolsa de Valores, são obrigadas a divulgar dois balanços diferentes: seguindo o padrão Bacen-GAAP e em IFRS. A partir desse contexto, este estudo objetivou comparar a relevância desses dois tipos de informações. Era esperado que as informações em IFRS fossem, de forma geral, mais relevantes do que as em Bacen. Para tanto, a metodologia envolveu o uso do Modelo de Ohlson (1995) com adição de variáveis de controle e dados em painel para os anos de 2010 a 2017. Foram estimados dois modelos, um para cada tipo de informação, e a análise da relevância deu-se com base nos valores do R2, critérios de informação e teste de robustez. Os resultados foram estimados por efeitos fixos corrigidos por erro-padrão robusto agrupados por empresas. No modelo com todas as variáveis, o IFRS foi mais value relevant do que Bacen. Já na estimação separada do LPA, este, quando mensurado em Bacen, é mais relevante, mas isso se inverte na estimação do VPA, em que o IFRS tem maior relevância. Além disso, o LPA apresenta maior poder explicativo do que o VPA. As diferenças na relevância, no entanto, são sutis, o que sugere interferências do ambiente institucional brasileiro. Esses resultados podem sugerir uma reflexão do Banco Central no sentido de analisar a adoção das IFRS de forma plena, o que caracterizaria uma economia de custos de divulgação. / The Brazilian financial institutions that have an Audit Committee and/or are listed on the Stock Exchange are obliged to disclose two different balance sheets: one following the Bacen GAAP standard and the other in IFRS. From this context, this research aimed to compare the relevance of these two types of information. It was expected that IFRS information would, in general, be more relevant than those in Bacen. To do so, the methodology involved the use of the Ohlson Model (1995) with addition of control variables, and panel data for the years of 2010 to 2017. Two models were estimated, one for each type of information, and the analysis of relevance was given based on the R2 values, information criteria and robustness test. The results were estimated by fixed effects, corrected by robust standard error grouped by companies. In the model with all variables, the IFRS was more value relevant than Bacen. On the other hand, in the separate estimation of the LPA, when measured in Bacen is more relevant, but this is reversed in the VPA\'s estimation, in which the IFRS is more relevant. In addition, the LPA has more explainatory factor than the VPA. The differences in relevance, however, are subtle, suggesting interference from the Brazilian institutional environment. These results may suggest a reflection by the Central Bank in order to analyze the adoption of IFRS in full, which would mean a disclosure cost saving.

A presente pesquisa objetivou investigar a relevância das informações relacionadas às reservas provadas de petróleo e das informações contábeis (lucro e patrimônio líquido) divulgadas por empresas petrolíferas. Por meio de um estudo de value relevance aplicado ao setor petrolífero mundial, o problema de pesquisa desta tese foi traduzido na seguinte questão: qual a relevância das informações relacionadas às reservas provadas de petróleo e das informações contábeis (lucro e patrimônio líquido) divulgadas por petrolíferas integradas e listadas na Bolsa de Valores de Nova Iorque (New York Stock Exchange - NYSE), durante o período de 2001 a 2012? Para responder a essa questão e atingir o objetivo proposto, foram aplicadas regressões considerando a técnica de Dados em Painel em uma amostra composta por 15 petrolíferas, cada uma com observações para os 12 anos pesquisados, totalizando 180 empresas-ano. Foram testados 8 modelos, todos tendo como variável dependente o logaritmo neperiano ou natural (ln) do preço médio das ações, considerando os preços de fechamento dos meses de novembro, dezembro, janeiro e fevereiro. Como variáveis explicativas foram testadas o Patrimônio Líquido (PL), o Lucro Líquido (LL), os Custos Capitalizados (CC), o Volume de Reservas de Óleo e Gás (RPO&G), suas alterações e o Fluxo de Caixa Futuro Descontado (FCD) decorrente dessas reservas. Os resultados mostraram que as informações sobre o PL são mais relevantes do que as informações sobre os resultados (LL). As informações sobre os Custos Capitalizados são relevantes e com forte relação inversa (negativa) com os preços das ações. Fraca relevância das informações sobre o volume das Reservas Provadas de Petróleo e do Fluxo de Caixa Futuro Descontado relativo a essas reservas. Quando desagregados em seus componentes principais (revisões, melhorias de recuperação, descobertas, compras, vendas e produção) a informação sobre o volume das reservas ganharam relevância. Especificamente, observou-se considerável relevância das informações sobre descobertas, produção e compra de petróleo. Por fim, os resultados indicaram que o valor de mercado de uma petrolífera é função da variável contábil PL e de informações relacionadas às reservas provadas de petróleo e de gás. Esse achado reforça a ideia de que os dados contábeis são informações incompletas para a determinação do valor de uma petrolífera, sendo que as informações relacionadas às reservas provadas de petróleo e de gás contribuem incrementando a relevância das variáveis contábeis mensuradas a valores históricos. Em decorrência disso, informações adicionais em notas explicativas sobre as reservas de petróleo são relevantes e necessárias, além das tradicionais já divulgadas nas demonstrações financeiras. / This actual research investigated the relevance of information related to proven reserves of oil and accounting information (net income and book value) disclosed by oil companies. Thus, by means of a value relevance study applied to the global petroleum industry, the following question resulted from the research problem: What relevance does information related to proven reserves of oil and accounting information (net income and book value) disclosed by integrated oil companies that are listed on the stock exchange in New York (New York Stock Exchange - NYSE), during the period 2001-2012, have? To answer this question and achieve the proposed objective there were applied panel data regressions in a sample of 15 oil companies, each company with observations for 12 years, totaling 180 observations. There have been tested 8 models, each of them having as dependent variable the Naperian or natural logarithm (ln) of the average share price, considering the closing prices of November, December, January and February. As independent variables have been tested book value (PL), net income (LL), capitalized costs (CC), volume of gas and oil reserves (RPO&G), components of the change in reserve value, discounted future cash flow (FCD) of the reserves. The results revealed that the information about PL is more relevant than the information about LL. The information about the capitalized costs is relevant, with a strong inverse negative relationship with the share prices. Further, the results demonstrated a weak relevance of information on the volume of gas and oil reserves and the discounted future cash flow of the reserves. When broken down into its main components (reviews, recovery improvements, discoveries, purchases, sales and production), the information about volume of gas and oil reserves gained in relevance. Specifically, there has been observed a considerable relevance of information about discoveries, production and the purchases of oil and gas. Lastly, the results indicated that the market value of oil company is a function of PL variable and accounting information relating to proved oil and gas. These findings reinforce the idea that the accounting data are incomplete information for determining the value of an oil company, as the information related to proven reserves of oil and gas contribute to an increasing relevance of the measured accounting variables in historic values. As a result, additional information in the note about the reserves of oil is relevant and necessary, beyond the traditional remarks disclosed in the financial statements.

I examine whether religiosity is positively associated with the valuation multiples investors assign to fair valued items that are prone to managerial bias. Using a sample of U.S. banking firms, I find that the value relevance of net assets that are hard to verify is higher for firms located in more religious areas than for those located in less religious areas. Moreover, I hypothesize and find that audit quality and firm information environment quality moderate the positive association between religiosity and value relevance. I perform several robustness checks. First, I rule out several alternative explanations to my results. Second, I address the concern that my results suffer from an omitted correlated variable problem. Third, I show that my results hold for firms located in Urban as well as Rural areas. / Thesis (Ph.D, Management) -- Queen's University, 2013-11-28 11:01:35.578

Renneboog et al (2008) argue that it remains to be seen whether corporate social responsibility (CSR) can be priced. In light of this, this thesis tests the performance and market valuation of CSR indicators by using a comprehensive set of KLD indicators. Chapter Three of this thesis examines the effect of CSR on financial performance by incorporating CSR into the investment process. As no clear break point is found for the normalised KLD score, the net KLD score is used as an alternative portfolio metric. In addition, most KLD indicators are found to have insignificant alphas for the high-scoring, low-scoring, and long-short portfolios—meaning that investors do not earn abnormal returns through a long-short strategy. Moreover, insignificant alphas are recorded for most of the indicators under the best-in-class approach—meaning that the application of industry classification does not affect results. Finally, both the conditional Ferson and Schadt (1996) model and conditional three-factor model are used as robustness checks, with most indicators having insignificant alphas for these conditional models. As such, the results imply that there is neither outperformance nor underperformance when using portfolios formed with CSR scores; however, there are significant differences in factor loadings between high-scoring and low-scoring CSR portfolios. Chapter Four uses a framework consistent with the Peasnell (1982) and Ohlson (1995) model to examine whether CSR is reflected in share prices. The CSR indicator is treated as the “other information” variable, and the association between CSR and market price is estimated by controlling for book value of equity, net income and dividends. Although the market is found to value different KLD indicators differently, most of the indicators are found to have positive impact on market value (except for corporate governance and human rights). R&D and advertising expenditure are both added to the valuation model for robustness checking purposes. Some of the CSR indicators—and especially for the case of environment—are not valued during the earlier stages, but become increasingly valued over time. The ten industries are also found to have varying effects on market valuation. In summary, high-scoring CSR firms display higher valuations than low-scoring CSR firms, and thus it can be concluded that a socially responsible agenda does not conflict with maximising shareholder value. Since most of the CSR indicators in Chapter Four lead to positive market price valuations, Chapter Five aims to disaggregate the value effect into the separate components of ROE ratio, the implied cost of capital (ICC) and growth rate. Three different methodologies are used to test the relationship between CSR, ICC and the long-run growth rate. The relationship between CSR and growth rate is positive with all of the methodologies. However, the different methodologies return differing results for the relationship between CSR and ICC, which may be due to the different assumptions made by each approach. Furthermore, it suggests that long-run growth rate differences in general may be more important than ICC differences. Finally, most KLD indicators are found to have significantly higher P/V and ROE1 ratios for the high-scoring CSR portfolios than for the low-scoring CSR portfolios.

Abstract Problem background and problem discussion: The increased demands on companies and their ability to operate sustainably has made corporate social responsibility (CSR) a very hot topic in modern society. The academic debate has yet to put a definite answer on whether the engagement in CSR activities has a positive effect on a company financially. Previous research on stock listed in Sweden indicate that there is a positive relationship between environmental performance and that there is an asymmetry in how it is valued across company sizes. However, there has not yet been any research made into what impact size has on the value relevance of social CSR ratings. This will be tested by drawing from resource-based theory and legitimacy theory. Research question: How is the value relevance of social ratings affected by accounting for company size? Purpose: The purpose is to examine what effect the inclusion of corporation size has on the value relevance of social CSR ratings. Theory: The study primarily utilizes Stakeholder theory, the resource-based theory and legitimacy theory. Method: This is a quantitative study in a panel data setting with a deductive research approach. The practical method is a regression analysis that assesses the value relevance of CSR measures at the OMX Stockholm for the years of 2006, 2007, 2008, 2009, 2011 and 2013. The study encompasses 349 Small-, medium- and large-sized companies and has a total of 1429 observations, which have been subject to statistical significance tests. Results and analysis: The results show that social, environmental and overall CSR ratings are value relevant and associated with lower market values. There also seems to be little impact on results by including company size as a variable. Furthermore the results of this study differ from previous research, implying that results are very sensitive to changes in the regression model. Conclusion: The results of the study lead us to believe that size has little impact on how value relevant social ratings are. This implies that regardless theory such as the resource-based and legitimacy theory these cannot be supported in practice among Swedish firms listed at OMX Stockholm. Furthermore, our method gives different results with regard to previous research done on the Swedish market and indicates that there is a negative relationship between CSR ratings and market value.

Advertising expenditure is one of the most important budget items supporting marketing activities for most companies, and may be treated as an intangible asset. Through the impact on demand and costs, advertising activities affect the firm’s pricing and output decisions as well as the firm’s market value (Tannous, 1997; Chauvin & Hirschey, 1994). Despite the significant economic importance of advertising expenditure, not much attention has been given to the value relevance of advertising expenditure and the impact of advertising expenditure disclosure on firms’ market value. Most of the empirical studies for value relevance of advertising expenditure have been conducted using data from the US and UK Academic research on the value relevance of advertising expenditure in Canada is nonexistent. The accounting standard applied in Canada is different from that used in prior US and UK studies. . Canada adopts Canadian GAAP before 2011, and switches to IFRS from 2011onwards. Both regimes do not require firms in Canada to disclose advertising expenditure. However, most US studies use data before 1994 to analyze value relevance of advertising expenditure. Before 1994, disclosing advertising expenditure is mandatory for US firms under US GAAP. The UK evidence uses data before 2005, during which period UK firms still adopt UK GAAP. Although UK. GAAP does not require companies to disclose advertising expenditure, unlike IFRS, different accounting standards can lead to different financial data reporting and different results. In addition, studies on the impact of voluntary disclosure of advertising expenditure on market value are nonexistent. Furthermore, Canada has a more stable financial system than that of the US and UK In this context, the objective of this thesis is to initiate research on the important dimension of advertising expenditure among Canadian firms. The findings of this thesis will enhance understanding of the relationship between advertising expenditure and market value, and companies’ decisions to voluntarily disclose advertising expenditure on their market value.