K. P. Venugopala Rao
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The relevance of accounting information in the era of Ind AS: Evidence from a Nifty Energy Index
K. P. Venugopala Rao , Farha Ibrahim , Nidhi Phutela doi: http://dx.doi.org/10.21511/imfi.19(2).2022.17Investment Management and Financial Innovations Volume 19, 2022 Issue #2 pp. 201-210
Views: 514 Downloads: 193 TO CITE АНОТАЦІЯThis paper investigates the value relevance of the financial information reported by energy companies included in the NSE Energy Index after the mandatory adoption of the Indian Accounting Standards (Ind AS) for the 2016–2017 accounting year. The fixed-effects model was employed on the panel data of energy companies included in the NSE Energy Index to study the impact of the accounting information on the market price of the shares for the period 2017–2021. The study suggests that a company’s book value consistently explained the variation in the market price across each year individually. Moreover, with the control of time across firms for the study period, book value per share and net cash flow from investing activities have significant explanatory power on the market price of a company’s shares. Profit after tax, which is widely used to determine a firm’s performance, cannot explain the variability in the market price of shares.
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Value relevance of financial information: A comparative study of pre- and post- implementation of Indian accounting standards
K. P. Venugopala Rao , Farha Ibrahim , Mani Sree Tadi doi: http://dx.doi.org/10.21511/imfi.20(1).2023.07Investment Management and Financial Innovations Volume 20, 2023 Issue #1 pp. 68-76
Views: 680 Downloads: 346 TO CITE АНОТАЦІЯIn 2016, India implemented new accounting standards, Ind AS, aligning with IFRS to increase transparency in the financial reporting of Indian companies. This study examines the value relevance of financial information in India before and after the adoption of Indian accounting standards (Ind AS) by comparing the published financial statements in pre- and post-Ind AS periods and determines the influence of financial information on the market price of shares. The study period is for twelve years, from 2011 to 2022, divided into 2011–2016 (pre-Ind AS period) and 2017–2022 (post-Ind AS period). To evaluate the value relevance of financial information, the Ohlson pricing model is employed on the panel data of the blue-chip companies listed in the Nifty 50 Index. The results from the Least Squares regression reveal that the net cash from investing activities, profit-after-tax, and book-value-per-share were relevant for investment decisions prior to the adoption of the Ind AS. In contrast, the profit-after-tax had no explanatory power during the post-Ind AS period. However, the net cash from investing activities and the book-value-per-share significantly influenced the market price of equity since the implementation of Ind AS. The value relevance of the accounting statements was superior in the pre-Ind AS period compared to the post-Ind AS.
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Corporate reporting behavior: Factors influencing the adoption of integrated reporting in India
Problems and Perspectives in Management Volume 22, 2024 Issue #2 pp. 453-462
Views: 173 Downloads: 36 TO CITE АНОТАЦІЯCorporations have a responsibility to provide a fair view of their financial state to their stakeholders. To facilitate the reporting process, the IFRS recommends the integrated reporting framework, which firms may may adopt voluntarily. This study examines the motivations of management in voluntarily disclosing capitals-related information in annual reports of companies listed on the Nifty Metal Index and their willingness to adopt the IR framework. It also empirically investigates how a company’s long-term and short-term goals impact integrated reporting adoption. The Integrated Reporting Capitals Index (IRCIN) was constructed to study the reporting behavior of companies within the specified framework. The reporting patterns within the metal industry are analyzed by employing the fixed effects model. Results highlight the interconnectedness of financial and non-financial capital dimensions in corporate reporting practices, albeit with a strong emphasis on financial capital. The average word count describing the financial capital was high, while the intellectual capital was the lowest. Strategic management evaluated via cash flow from investing activities proved statistically significant at the 5% level. Similarly, short-term goals indicated by profit after tax were found to play a crucial role in encouraging corporations within the Nifty Metal Index to adopt the integrated reporting framework. Conversely, book value per share exhibited a negative coefficient, indicating a historical disconnect with the reporting entities. These insights suggest that the adoption of the integrated reporting framework by management is driven by strategic goals, short-term objectives, and overall company performance.