The Study on Accounting Information Value Relevance in the Practice of IFRS 16 - An Empirical Study of Taiwan

The study uses Taiwan listed companies as a sample to test whether relevant financial rations have changed significantly, Base on the Ohlson(1995) evaluation model, this study examines the effect of net income and equity book value on the value relevance after IFRS 16. This research sample takes all listed firms as full research sample. Next, this study divides the sample into leasing asset sensitive industries and non-sensitive industries, and discusses separately. First, paired sample T test is adopted to detect whether the financial ratios are affected significantly after implementing IFRS 16. It is found that debt ratio, debt to equity ratio, total asset turnover ratio and depreciation expenses are all significantly changed whether in sensitive or non-sensitive industries. However, current ratio and interest expense rate have not changed. Based on Ohlson evaluation model, this study examines the value-relevance effect of net income, equity book value on the stock price after adopting IFRS 16. When testing with 2018 and 2019 third quarter financial data, equity book value and earning per share all have higher value relevance on stock price after adopting IFRS 16. However, in terms of annual data, the degree of influence is all not significant. It might be that, since the IFRS 16 leasing assets and liabilities have been revealed in the interim financial report, the stock price has been reflected in the middle of the year. It is also possible that when annual report is announced, the stock price of each company has fallen sharply due to the impact of COVID-19, and financial information is no longer value-relevant.