Value Relevance of Accounting Information during IFRS Convergence Process and Indonesia
P_it=α_0+α_1 E_it+α_2 EBV_it+ε_it 1)
P_it = stock price of firm i (at three months after end of year t),
E_it = Earnings per share for firm i during period t,
〖EBV〗_(it ) = Equity book value per share for firm i at the end of period t.
R_it=α_0+α_1 E_it/P_(it-1) +α_2 ((E_it-E_(it-1)))/P_(it-1) +ε_it (2)
R_it = Stock return firm i for year t (annual return from month -9 to +3),
E_it = Earnings per share of firm i for year t,
E_it-E_(it-1) = Change in annual earnings per share,
P_(it-1) = The stock price at the beginning of nine months prior to fiscal year end.
This study estimates price model and return model described above to examine the hypothesis, and the results of the two models are expected to complement each other. To examine the change in relative value relevance of accounting information under substantially IFRS-convergent accounting standards after recent revisions of the standards, this study estimates equation 1 and 2 using subsample of the period before and after standards changes (2005-2008 and 2009-2012). We expect the coefficients of E_it,〖EBV〗_(it