The Impact of the Fair Value Information against the Market Value of Equity of Financial Institutions

• Main Authors: Yu-lin Hsu, 徐裕霖
• Other Authors: Ling-Fen Lin
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/49993171085935802412

碩士 === 國立成功大學 === 會計學系碩博士班 === 96 === 　　Accounting Research and Development Foundation Promulgates SFAS No.27 in 1997, the principle used to evaluate financial instruments is changed from history cost principle into lower of cost or market approach. Afterwards, it issue SFAS No.34 in 2003, the appraisal method of all financial instruments is changed into fair value approach except few parts. Disclosed derivative instruments is changed recognized in the balance sheet. It is expected that the information can be more appreciated reflect the actual situation of the transaction of the enterprise. 　　 　　This study investigates whether it will be an influence to bank market value of equity when the appraisal method of investment securities use fair value approach, and the difference of value-relevance of information under SFAS No.27 and SFAS No.34. The empirical results indicate as follow: 1.Both unrealized gains/losses and realized gains/losses on securities investment have significant positive effects on market value of equity, consistent with our hypothesis. It shows that fair value information of investment securities are value-relevant to market value of equity of financial institutions. 2.Although the interest rate changes have a negative effect on market value of equity, but the coefficient is not significant. 3.The cash flow returned by selling investment securities is not significant different from zero on market value of equity. 4.The change of the book value of equity resulting from issuance of new equity, it has a significant positive effect on market value of equity. 5.Earning management by selling investment securities has a significant negative effect on market value of equity. 　　 　　The Impact of the fair value information against the Market Value of Equity of Financial Institutions on 1998-2005, has no significant difference with all period. However, the information does not have enough evidence that it has significant effect on market value of equity. This result may reflect the condition that the implement period of SFAS No.34 is only one year, therefore the sample for our study is not enough.