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The Impact of IFRS Adoption on the Value Relevance of Net Worth in Taiwan’s Financial Institutions

Guan-Ru Chen Su-Li Lin

Economic Sciences2026https://doi.org/10.69889/5s8an936article
ABDC C
Weight
0.50

What the paper says

This study investigates the value relevance of accounting information, specifically net worth per share, for twenty financial institutions in Taiwan following the adoption of International Financial Reporting Standards (IFRS) in 2013. The transition from Generally Accepted Accounting Principles (GAAP) to IFRS represents a paradigm shift from historical cost to fair value accounting. We hypothesize that this shift has strengthened the relationship between reported net worth and market stock prices. Using a regression model of net worth on stock prices and employing the Chow Test to identify structural breaks, we analyze financial data from pre- and post-IFRS periods. The empirical results reveal that for 15 out of the 20 sampled companies, the Residual Sum of Squares (RSS) decreased in the post-IFRS period, indicating a tighter fit between book value and market value. These findings suggest that IFRS adoption has significantly enhanced the information content of the balance sheet for the Taiwanese financial sector.

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https://doi.org/https://doi.org/10.69889/5s8an936

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@article{guan-ru2026,
  title        = {{The Impact of IFRS Adoption on the Value Relevance of Net Worth in Taiwan’s Financial Institutions}},
  author       = {Guan-Ru Chen Su-Li Lin},
  journal      = {Economic Sciences},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.69889/5s8an936},
}

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The Impact of IFRS Adoption on the Value Relevance of Net Worth in Taiwan’s Financial Institutions

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.