Abstract
The study is aims to examine whether the adoption of accounting measurement of AIS/IFRS standards has resulted in more relevant financial information for decision making or not. This study examines the use of fair value measurement on value of financial instruments to capture if there is any effect on the market value of financial companies. Ohlson (1995) framework has been employed to investigate this relationship. The Jordanian financial sector was the sample for the study during the years from 2012 to 2016. Our study findings, based on the results of correlation and multiple regression analysis showed that, market value of Jordanian financial companies is significantly positively related to financial instruments measured by fair values. The final result assured that; the new accounting measurements methods such as fair values are value relevant for Jordanian financial companiesduring all period of the study.
Highlights
The contribution of Ball and Brown study in 1968 was the starting point for almost all research concerning the relevant values of accounting information
This result indicates that Jordanian financial company’s reports include unrealized gains and losses because of fair value use; As we mentioned in our model fair value of financial instruments (FVFI) equals book value of financial instruments (BVFI) plus of fair value revaluations
In the tests of the study we will examine which of BVFI or FVFI have more ability to capture the market value for Jordanian financial companies
Summary
The contribution of Ball and Brown study in 1968 was the starting point for almost all research concerning the relevant values of accounting information. Measurement of assets using fair value in developing countries was regarded irrelevant for several reasons such as, the lack of active markets to assets and liabilities measured at fair value, because measurement in such markets makes fair values estimations based on subjective management methods; this produce irrelevant and unreliable information for decision making Another problem associated with the use of fair value in developing countries arise from the high costs associated with such values especially for medium and small size entities; it is expected that such obtained values to be unbeneficial and contradicts with the concept of information cost/ benefit value for producing information. These reported figures create greater volatility in income and share prices (Barth, 2006)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
