| Summary: | 碩士 === 中原大學 === 會計研究所 === 89 === The value-relevance is the empirical relation between stock market value (or changes in value) and particular accounting numbers for the purpose of assessing or providing a basis of assessing those numbers’ use or proposed use in an accounting standard. This study investigates the value-relevance of fair value disclosures under Statement of Financial Accounting Standards in Taiwan No.27 by examining whether differences between the market value and book values of common equity can be explained in a predictable way as a function of differences between fair value estimates disclosed under SFAS No. 27 and their related book values for both sample years, 1998 and 1999. The inquiry focuses on bank because SFAS No. 27 disclosures relate only to financial instruments and thus are more comprehensive for bank than for firms in other industries, in that the fair values of most major assets and obligations are disclosed.
After we testing the samples that are deflated, ranked and financial structure and audit-quality controlled respectively, the fair value of SFAS No. 27 variables are not found to have the significant explanatory power except the off-balance-sheet credit risk.
Our second set of tests examines whether the fair value of the financial instruments provide incremental information after controlling different year sample. The result that the fair value instruments liabilities variable are significant.
Finally, an important finding is that a proxy for default risk to nonperforming loans and a proxy for the intangible attributable to core deposit are significantly associated with bank share prices.
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