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| Author: | Niskanen, J. Kinnunen, J. Kasanen, E. |
| Title: | A note on the information content of parent company versus consolidated earnings in Finland |
| Journal: | European Accounting Review
1998 : MAY, VOL. 7:1, p. 31-40 |
| Index terms: | CONSOLIDATED ACCOUNTS ACCOUNTING INFORMATION SYSTEMS FINLAND EUROPE |
| Language: | eng |
| Abstract: | In most European countries corporate annual reports include parent company statements, whereas in the USA only consolidated financial statements are available to shareholders. Using accounting and market data from 35 Finnish listed firms, the information content of consolidated vs. parent-only earnings is examined, after controlling for each other. The results show that consolidated earnings are significant incremental explanatory variable for stock returns, while parent-only earnings are not. The findings suggest that consolidation improves the information content of earnings, and the requirement to disclose parent-only earnings should be based on arguments other than their value-relevance to shareholders. |
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