Ohlson Model Research Articles

Tobin’s q Revisited: A Theoretical and Empirical Framework for Accurate Business Valuation.

Objective - This study revisits Tobin’s q by offering a theoretically derived empirical model based on the Ohlson framework, aiming to correct the misapplications found in existing literature. Methodology/Technique – While Tobin’s q has been extensively used as a measure of firm value, the traditional empirical models often assume a linear relationship with variables such as growth, leverage, and profitability. Finding – This paper demonstrates that even in a basic model, such as the Gordon growth model, this linearity does not hold. In fact, this paper shows that a linear relationship will hold only under restricted conditions and only with certain explanatory variables. Novelty – By introducing a theoretically sound equation for Tobin’s q, this study highlights the limitations of current empirical methods and provides a new perspective for firm valuation research. The results contribute significantly to improving the accuracy of business valuation models, particularly in settings with varying capital structures and market dynamics. Type of Paper: Theoretical JEL Classification: G12, G19. Keywords: Tobin’s q; Ohlson model; Firm value; Valuation Reference to this paper should be referred to as follows: Tharavanij, P. (2024). Tobin’s q Revisited: A Theoretical and Empirical Framework for Accurate Business Valuation, GATR-Global J. Bus. Soc. Sci. Review, 12(3), 125–133. https://doi.org/10.35609/gjbssr.2024.12.3(3)

Utilizing Genetic Algorithms in Conjunction with ANN-Based Stock Valuation Models to Enhance the Optimization of Stock Investment Decisions

Navigating the stock market’s unpredictability and reducing vulnerability to its volatility requires well-informed decisions on stock selection, capital allocation, and transaction timing. While stock selection can be accomplished through fundamental analysis, the extensive data involved often pose challenges in discerning pertinent information. Timing, typically managed through technical analysis, may experience delays, leading to missed opportunities for stock transactions. Capital allocation, a quintessential resource optimization dilemma, necessitates meticulous planning for resolution. Consequently, this thesis leverages the optimization attributes of genetic algorithms, in conjunction with fundamental analysis and the concept of combination with repetition optimization, to identify appropriate stock selection and capital allocation strategies. Regarding timing, it employs deep learning coupled with the Ohlson model for stock valuation to ascertain the intrinsic worth of stocks. This lays the groundwork for transactions to yield favorable returns. In terms of experimentation, this study juxtaposes the integrated analytical approach of this thesis with the equal capital allocation strategy, TAIEX, and the Taiwan 50 index. The findings affirm that irrespective of the Taiwan stock market’s bullish or bearish tendencies, the method proposed in this study indeed facilitates investors in making astute investment decisions and attaining substantial profits.

Risk Analysis of Bankruptcy in the U.S. Healthcare Industries Based on Financial Ratios: A Machine Learning Analysis

The prediction of bankruptcy risk poses a formidable challenge in the fields of economics and finance, particularly within the healthcare industry, where it carries significant economic implications. The burgeoning field of healthcare electronic commerce, continuously evolving through technological advancements and changing regulations, introduces additional layers of complexity. We collected financial data from 1265 U.S. healthcare industries to predict bankruptcy based on 40 financial ratios using multi-class classification machine learning models across various industry subsectors and market capitalizations. The exceptionally high post-tuning accuracy rates, exceeding 90%, along with high-performance metrics solidified the robustness and exceptional predictive capability of the gradient boosting model in bankruptcy prediction. The results also demonstrate the power and sensitivity of financial ratios in predicting bankruptcy based on financial ratios. The Altman models highlight the return on investment (ROI) as the most important parameter for predicting bankruptcy risk in healthcare industries. The Ohlson model identifies return on assets (ROA) as an important ratio specifically for predicting bankruptcy risk within industry subsectors. Furthermore, it underscores the significance of both ROA and the enterprise value to earnings before interest and taxes (EV/EBIT) ratios as important parameters for predicting bankruptcy based on market capitalization. Recognizing these ratios enables proactive decision making that enhances resilience. Our findings contribute to informed risk management strategies, allowing for better management of healthcare industries in crises like those experienced in 2022 and even on a global scale.

Fair values in extreme markets

AbstractThis study investigates the valuation of fair values in extreme market conditions. Using a modified Ohlson model and a large US sample, this study finds that the valuation of fair values in extreme market conditions is consistent with the presence of a positive feedback loop bias. This bias manifests as irrational exuberance in overheated markets and undue panic in depressed markets. The results are robust under several different test designs. Additional tests of moderating factors show that good performance and low risk intensify irrational exuberance in overhead markets, and poor performance and high risk worsen undue panic in depressed markets.

IFRS adoption and the value-relevance of financial statements figures in Nigeria

Research Question: Has IFRS adoption improved the value-relevance of financial statement figures in Nigeria? Motivation: The informativeness of the reported earnings, book values, and cash flows depends on the accounting standards used in preparing the financial statements. IFRS is a global set of accounting standards that tries to improve the relevance of accounting figures by recommending more realistic measurement and recognition criteria and increasing the level of disclosure of relevant information. Idea: The value relevance of accounting figures in predicting stock prices is widely acknowledged. However, this study tests whether IFRS adoption significantly improves this value-relevance by increasing the degree of correlation between accounting figures and stock prices in Nigeria. Data: The data were collected from the Bloomberg market data terminal and Datastream financial database. A sample of 85 listed companies was selected. The sample period was from 2007 to 2016. Tools: The study applied the Ohlson model (using fixed and random-effect models) along with the Driscoll-Kraay standard errors (DKSE) and Panel-corrected standard errors (PCSE) to anticipate autocorrelation, heteroscedasticity, and cross-sectional dependence biases. The Ohlson model was estimated separately for the pre- and post-IFRS adoption periods to detect changes in value relevance. The interactions of the IFRS dummy with earnings, book values, and cash flows were also estimated separately to detect the significance of IFRS interaction with the accounting figures. Findings: The results showed an overall increase in value-relevance by comparing adjusted R2s across the pre- and post-IFRS adoption period. Also, the interactions of IFRS with earnings, book value, and cash flows were all significant. Contribution: The study contributes to the existing literature by including cash flow in the value-relevance test in Nigeria and by applying estimation techniques that control for possible estimation biases. The authors recommend that investors pay more attention to these accounting figures under the IFRS regime when making investment decisions.

채권내재등급(BIR)의 가치관련성에 관한 연구

[Purpose]This study aims to analyze whether bond implied ratings affect the value relevance of accounting information by conveying information about firms’ future cash flows, or whether optimistic(pessimistic) information is presented to the capital market and biased investor sentiment intervenes in stock price determination using only certain information. [Methodology]We select a sample of 531 firm－year listed on the KOSPI from 2015 to 2020 for which credit ratings and bond implied ratings is available. They are divided into three groups based on the relative grade of credit ratings and bond implied ratings, and a dummy variable identifying these groups is added to the Ohlson(1995) model. [Findings]The results are as follows. First, we find that the difference between credit ratings and bond implied ratings does not in itself convey information about stock price. However, it does lead to differences in the extent to which accounting information provided by firms is reflected in firms stock price. Second, we observe that for groups with implied bond ratings higher than credit ratings(optimistic), EPS is more relevant and BPS is less relevant compared to other groups. We also observe that for the group with implied bond ratings lower than credit ratings(pessimistic) BPS is more relevant that other groups. These results suggest that investor sentiment generated by implied bond ratings disclosure affect the value relevance of accounting information. [Implications]This study is more closely reflective of the actual process in that it considers the direction of credit ratings as opposed to previous study, which defined rating inflation as the situation where the credith ratings is higher that the bond implied rating and considered it as the object of analysis.

Voluntary disclosure with the International Integrated Reporting Council (IIRC) framework and value relevance

Research aims: This paper aims to investigate whether voluntary disclosure of integrated reports (IR) with the International Integrated Reporting Council (IIRC) framework influences value relevance in Indonesia.Design/Methodology/Approach: The data covered the period 2017-2022 of all manufacturing companies in Indonesia listed on the Indonesia Stock Exchange (IDX). The total sample of this study was 606 firm-year observations. An IR Score was developed using the International IR Framework 2013, and content analysis was performed to measure IR adoption and practice. This study employed multiple linear regression to test the hypothesis. The authors also used two models: the Pricing Model for testing the main result and the Ohlson Model for testing robustness. Research findings: The result claims that the IR score yielded a positive and statistically significant effect on the value relevance of the company. In other words, companies with higher IR scores will also have a higher value relevance.Theoretical contribution/ Originality: First, this study contributes to the literature in accounting, stating that companies that adopt the IR framework can increase the value relevance. Second, by using different models to test the hypothesis, the results of this paper exhibit a consistent relationship.Practitioner/Policy implication: The study's findings help regulators develop new regulations.Research limitation/Implication: This research could only be generalized to Indonesian manufacturing companies. In addition, a significant number of Indonesian manufacturing companies continue to fail to submit integrated reports.

The Study of Equity Valuation Based on Modified Ohlson Model: Case of BYD

New energy vehicle companies are at an early stage of development and have large differences in terms of technological development, market maturity and R&D costs. In this context, traditional valuation methods do not meet the requirements for valuing new energy vehicle companies. This study modified the traditional Ohlson model according to the characteristics of new energy vehicle companies, adopts DuPont's analysis system to decompose and measure several financial indicators, addresses the problem that residual returns are difficult to predict directly, and provides a reasonable and accurate valuation of new energy vehicle companies to provide investors with basis. The actual valuation will also be demonstrated with the example of BYD.

Prediction and Comparison of Bankruptcy Models in Banking Sector Companies in Indonesia

The Covid-19 pandemic, coupled with the economic recession from 2019 to 2022, has adversely impacted various industries, leading to bankruptcies. Among the affected sectors, the banking industry faced significant challenges, experiencing disruptions in credit processes and fund distribution due to diminished purchasing power. This situation poses a severe threat to the banking sector, necessitating the monitoring of financial conditions through bankruptcy analysis as an early warning system for company performance. This study investigates potential differences in the results of financial distress prediction models—Altman, Springate, Zmijewski, Grover, and Ohlson—during the abnormal conditions of the Covid-19 pandemic. Using purposive sampling of banking companies listed on the IDX from 2019 to 2022, the study divided the samples into financial distress and non-financial distress categories. Analysis involved tests for multicollinearity assumptions, logistic regression, and accuracy/error rate calculations. The findings reveal variations in the predictive abilities of the Altman, Springate, Zmijewski, Grover, and Ohlson models. The Grover model emerged as the most accurate, with a 60% accuracy rate in predicting bankruptcy, while Altman, Springate, and Zmijewski models demonstrated low predictive values (0%, 0%, and 15% accuracy, respectively). The simplicity of the Grover model's measurement indicators, incorporating capital adequacy, EBIT, and ROA, offers a comprehensive view of bankruptcy prediction ratios. Moreover, stringent internal risk analysis and external factors, such as regulatory interventions, contribute to keeping banks resilient amid global economic crises. The research suggests that banking companies can benefit from employing the Grover method for bankruptcy analysis as part of their future anticipation strategy.

Is Disaggregate Form of Information Value Relevant: Evidence from Indian Listed Companies

Despite its scarcity, capital is necessary for a country’s economic development. To channelise capital foreign investment, financial intermediaries such as development banks, commercial banks, investment and financial institutions, insurance and investment banks are required. The expansion of the capital market is required to encourage and steer capital formation. The capital market encourages investment while also bringing vigour and dynamism to the country’s business organisations. The availability of accounting information and financial reporting is crucial for the effectiveness of capital markets, efficient resource allocation, capital information and economic development. Prior researchers prove the relevance of accounting information as a predictor of changes in stock behaviour in particular and growth of stock market in general. To augment this aspect the relevance of segment wise information provided by companies becomes important to be studied. Hence, the present study examines the influence of segment reporting on value relevance. Stock price after 90 days from the end of the financial year has been taken as a dependent variable and various segment related dimensions as independent variable for the period 2016–2017 to 2021–2022. It employed Ohlson (1995) model and indicates that Segment reporting information has significant and positive influence on value relevance thus it clearly indicates that investor’s view segment information while making investment decisions.

실물옵션을 활용한 Olhson 모형 가치평가에 관한 연구

This study newly suggests investor’s psychological expectation values as ‘other information’ not yet clearly identified in the Ohlson model. These values are calculated through real option valuation. A total of 9,791 annual corporate stock prices and financial statements are investigated for KOSDAQ companies from 2011 to 2021. According to the classification criteria of the Korea Exchange, the entire sample was classified into a total of 8 panels: bluechip, midsize, venture, and technology companies, and each further classified into two sub-groups based on their respective residual income signs. We empirically find that the real option value, assessing investors’ expectations for future profits, significantly contribute to explaining stock values along with the book value per share and residual income per share comprising the established Ohlson model. In particular, for companies with negative residual incomes, the real option value demonstrates a higher explanatory power for stock prices compared to those with positive earnings. Furthermore, robustness test shows that the real option value’s explanatory power for stock prices remains significant even when accounting for previously recognized factors such as cash dividends per share, market price to book value ratio, total debt ratio, systematic risk, and market index.

PREDICTING BANKRUPTCY OF MOBILE COMPANIES BEFORE AND AFTER THE PANDEMIC COVID-19 IN THE GREEK EMERGING MARKET

In this work we analyze three of the most basic bankruptcy prediction models that have been developed and in particular Altman's Z''-score model, Ohlson's model and finally Chesser's model. These models are then applied to the three mobile phone companies that operating in emerging market such as Greece. The aim of the present study is to determine firstly whether bankruptcy is looming in these mobile companies and secondly which of the used bankruptcy models present more accurate information about whether bankruptcy is present or looming. In addition, the bankruptcy risk of each company is determined based on its probability of bankruptcy and it is assigned a credit score based on which it is classified in a credit tier. Finally, the credit risk premium required by investors, the expected losses of its creditors and the expected value of the company in the event of bankruptcy are determined. The companies under review are Cosmote, Vodafone and Nova for the last five years 2018-2022. This five year of examined time period includes two years 2018-2019 before the pandemic Covid-19, the year of the pandemic 2020, and two years 2021-2022 after the pandemic, so it allow us to observe if there is an infection of the pandemic in the results of bankruptcy models
 Keywords: Bankruptcy, Emerging Markets, Corporate Finance
 JEL: G1, G3, G33.

Unlocking Investment Opportunities: Role Of Economic Growth on the Relationship Between Accounting Fundaments and Share Price of Firms in North Eastern Nigeria

Accounting fundamentals has been described as one of the key factors considered by investors when taking investment decisions. Previous studies focused on the role of accounting information on share price and completely underestimated the influencing role of real Gross Domestic Product (RGDP) on the relationship. Scholars have suggested that RGDP is important in understanding and explaining the change in share prices. Therefore, this study extended on the Ohlson model to incorporate RGDP so as to examine the moderating role of RGDP on the relationship accounting fundamentals and share price of listed manufacturing firms in Nigeria Exchange Group. The study covers 65 firms listed on the NGX for the period 2012 to 2021. The data for the study was sourced from NGX fact book and the Central bank Bulletin. The methods used for testing the information content of various accounting information were Ordinary Least Squared (OLS), Random Effects Model (REM), Fixed Effects Model (FEM). The findings from the analysis indicate that RGDP has significant moderating role on the relationship between accounting fundamentals and share prices. The study also reveals that Earning per share and Net book value per share and Price Earnings ratio are positively and significantly related to share price of listed manufacturing companies in NGX. Also reveals that PE is positively and insignificantly related to share price of listed manufacturing companies in NGX. On the basis of these findings, it was concluded that RGDP is a determinant for unlocking investment opportunities through accounting fundamentals in NGX. By implication, the reliability of accounting Fundamentals of listed manufacturing companies for investment decision could be enhanced in the NGX when the changing prices of shares are identified, captured, presented and equally published in the financial information of such firms by the preparers of accounti

연구개발비의 기업가치 평가지표로서의 유효성 연구

[Purpose] This study aims to empirically test whether the relationship between R&D expenditures and firm value depends on firm characteristics such as firm life cycle, technology level, and future growth prospects. Through this study, we also verify the effectiveness of R&D expenditures as an index of firm value evaluation.
 [Methodology] The research model is a modified version of the Ohlson model (1995), and 13,720 financial data of Korean listed firms extracted from KIS－VALUE and TS－2000 are used as samples. The technology level of the firms is classified by Eurostat Indicators, and the future growth prospects are classified according to the book－to－market ratio (BM ratio).
 [Findings] First, when analyzing all firms, we find that growth－stage R&D expenditures are more value－relevant than mature－stage R&D expenditures. However, when firms are divided into four groups (2×2) based on technology level and future growth prospects, we find that growth－stage R&D expenditures are more relevant to firm value than mature－stage R&D expenditures, only the group that satisfies at least one of the high－tech firms or firms with good future growth prospects. For non－high－tech firms and those with poor future growth prospects, there is no significant difference in the value relevance of growth－stage versus mature－stage R&D expenditures. Second, for all firms in the growth stage, we find that R&D expenditures have a greater impact on firm value than net income. Third, when dividing the growth stage firms into four groups (2×2) we find that R&D expenditures is more relevant to firm value than net income only for high－tech firms with good future growth prospects. In conclusion, R&D expenditures is a valid valuation indicator, and its relevance to firm value is higher for high－tech firms that are in the growth stage and have good future growth prospects.
 [Implications] R&D expenditures can be more effective valuation indicator when used in conjunction with the life－cycle stage, technology level, and future growth prospects (BM ratio) indicators. In addition, R&D expenditures can be useful in explaining the growth stock effect, in which high－tech firms in the growth stage or firms with good future growth prospects have market capitalizations that are higher than their underlying value.

The impact of environmental disclosure on value relevance: Moderating role of environmental performance

Existing research lacks to adequately examine how environmental performance moderates the influence of environmental disclosure on value relevance. This study pursues to investigate the direct influence of environmental disclosures on value relevance, measured by the fair value of common equity. Moreover, it tests how environmental performance moderates the influence of environmental disclosures on value relevance.Data were gathered from the annual reports of Jordanian industrial firms listed on the Amman Stock Exchange from 2018 to 2021. The study employed the Ohlson model to assess the value relevance. Furthermore, both earnings and the book value of equity were included as other independent variables, as required by the model.This study found that environmental disclosures positively impact the value relevance of industrial firms listed on the Amman Stock Exchange. Moreover, such disclosures positively influence the value relevance of industrial firms with greater environmental performance. Earnings and the book value of equity also positively influence the value relevance. The results were similar to those obtained by conducting panel regression after controlling for both the industry and year effects.It is therefore recommended that directors exploit environmental disclosures to increase the value relevance of the firm. At the same time, they should consider environmental disclosures as an essential component to integrate into future strategies. Hence, firm managers should consistently evaluate the environmental and financial performance, followed by developing well-designed strategies to increase the environmental performance and reliability of environmental disclosure due to their positive role in enhancing value relevance.

The value relevance of digitalization disclosure in integrated reports: A South African perspective

The inevitable disruptions in the Fourth Industrial Revolution necessitates that companies provide investors with digitalization disclosure in integrated reports. This paper investigated whether digitalization disclosure in integrated reports affects the share prices of South African listed companies. The relationship between digitalization disclosure and share prices is examined using the Ohlson (1995) Model through the application of panel data. A new proxy for the “other information” variable in the Ohlson (1995) Model was created for digitalization disclosure by developing a disclosure index to measure the scope of digitalization disclosure in integrated reports. The disclosure index was incorporated into a new text analysis software named the Fourth Industrial Revolution Disclosure Analysis Tool (4IRDAT), which uses algorithms based on natural language processing techniques to facilitate the content analysis of digitalization disclosure in integrated reports. Two scenarios were evaluated: including loss-making companies and excluding loss-making companies. The sample size, including loss-making companies and excluding loss-making companies, was 90 (270 observations) and 72 (216 observations), respectively, for three years from 2018 to 2020. It was established that there was an increase in digitalization disclosure over three years. The results indicated that digitalization disclosure had yet to be incorporated in the share price of South African listed companies for both scenarios. This study is indispensable to regulators, practitioners, standard setters, and academics because it provides empirical evidence on the value relevance of digitalization disclosure in integrated reports. This area has not been interrogated in a South African context.

Value Relevance of Operating Performance During the GST and SST Periods in Malaysia

This study’s primary objective is to determine the value relevance of operating performance, represented by earnings per share (EPS), cash flow from operations (CSH) and book value of equity (BVE) during the GST and SST indirect tax periods. The Ohlson (1995) model was used to determine the market value-relevance. We used Ordinary Least Squares (OLS) regression to examine the hypotheses constructed based on 249 non-financial listed firms from the manufacturing and service sectors on the Malaysian Market from 2015 to 2019. Based on the combined 1,245 firm observations of Goods and Services Tax (GST) and Sales and Services Tax (SST) periods, the outcome reveals the existence of significantly positive relationships between EPS, CSH and BVE and share price (SHP). The findings suggest that EPS, CSH and BVE were the accounting information adopted by investors to decide on any investments during the indirect tax periods. In addition, by regressing separately GST and SST indirect tax period by utilising 498 firm-year observations, we find only EPS and CSH are positive and significant to SHP. This study has implications for academics, industrialists, regulators and investors, that EPS and CSH validated value relevance of operating performance during the GST and SST indirect tax periods.

What The Best Prediction Financial Distress With Compare Zmijewski, Altman Z-Score And Ohlson ?

financial distressis a condition where the company's finances are experiencing a loss because it is considered unable to pay its obligations when they are due. The increase in cigarette excise rates will certainly have an impact on the shares of cigarette issuers and result in an increase in the selling price of cigarettes which will allow the company to experience financial distress. Cigarette companies need to analyze the company's financial condition, in which companies can predict opportunities for financial distress. Among them are using bankruptcy prediction models, one of which is zmijewski, altman z-score and ohlson. The aim of the researchers was to determine the prediction of financial distress in cigarette companies listed on the IDX for the 2018-2022 period using the Zmijewski method, altman z-score and Ohlson. This research is a descriptive research,The results show that the Zmijewski method predicts all healthy companies, the Altman Z-Score method for three companies is said to be healthy and the Ohlson method has two companies in good health. Ohlson's method has a high degree of accuracy72% with Typel Elrror 1 at 20% and Typel Elrror II at 8%. So that the Ohlson model is the most appropriate to use in predicting financial distress in cigarette companies listed on the Indonesian Efek Exchange (BEI).

Value Relevance of GRI Economic and Ethics/Integrity Disclosure among Listed Manufacturing Firms in Nigeria: The Role of Ownership Concentration

This study evaluates the value relevance of GRI Economic and Ethics/Integrity Disclosures among listed Manufacturing Firms in Nigeria. It also investigates the role of ownership concentration in influencing the value relevance of GRI disclosures. The study adopted the purposive sampling technique to select a sample of 43 listed Manufacturing Firms on the Nigerian Exchange Group (NGX) for the 8-year period from 2014–2021. The study used the Ohlson (1995) model to analyze the value relevance of GRI Economic and Ethics/Integrity Disclosures. The results of the study showed that GRI Economic Disclosure, Ethics/Integrity Disclosure and Ownership Concentration are value relevant in the Nigerian listed Manufacturing Firms. Further, the study found that ownership concentration has a significant moderating influence on the value relevance of GRI Economic and Ethics/Integrity Disclosures among listed Manufacturing Firms in Nigeria. The results of the study provide evidence that listed Manufacturing Firms should pay special attention to GRI Economic and Ethics/Integrity Disclosures in order to enhance firm value and investor decision-making. The study contributes to the extant literature by being the first to investigate the value relevance of GRI Economic and Ethics/Integrity Disclosures and the role of ownership concentration among listed Manufacturing Firms in Nigeria. The study recommends that listed Manufacturing Firms should respond to the GRI Economic and Ethics/Integrity Disclosure requirements in order to enhance firm value.

IFRS-16 and Information Quality of Listed Non-Financial Firms in Nigeria

Lease accounting was revised in 2016 due to the contentious nature of its reporting in the financial statements under IAS 17- particularly in respect of operating leases. IAS 17 was criticized for impairing the quality of accounting information due to the inappropriate treatment of identified resources in control and financial obligations by lessee firms. IFRS 16 (effective 2019) eliminates the distinction between operating and finance leases requiring right-of-use assets and associated liabilities to be reported on the Statement of Financial Position. In cognizance of its objective of enhancing information quality, the paper assessed the relevance of accounting information reported subject to compliance with IFRS 16 in the context of listed non-financial firms in Nigeria utilizing lease finance. The Ohlson model was modified to regress share price on the book value of equity per share, earnings per share, and the interaction of these variables with IFRS 16 adoption using a data set for 2016-2021. GLS regression results indicate book value per share to have increased relevance with the adoption of IFRS 16, whereas the relevance of earnings per share remains unchanged. The paper concludes that IFRS 16 adoption enhances the information quality of listed non-financial firms in Nigeria. Recommendations are made for firms to optimize accounting processes to achieve or sustain information quality by adopting IFRS 16. The IASB, as a standard-setter, should also prioritize the cost-efficiencies of standards in their implementation, as this could account for a disparity in the perceived accounting information quality of varying-sized firms).