Value Relevance of Accounting Items under IFRS: Theory and Review of Literature

Abstract

This paper reviews existing literature in the field of value relevance in the context of new accounting standards i.e International Financial Reporting Standards both before and after introduction. The theory of value relevance research and contextual argument of the proposed impact of IFRS on accounting numbers has been discussed. The review suggests that there is no consensus in the existing literature regarding impact of IFRS on value relevance of accounting figures. The research identifies gaps in existing literature and concludes with scope of future research in this field.