Relative Value Relevance of Operating Cash Flows of Measurement View
This study aims to examine the value relevance of operating cash flows disclosures (direct method versus indirect method) by the measurement view. The proposed hypotheses state that the division of information sets in the cash flows statement helps to raise the ability of explaining the value of a c...
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| Autores principales: | , |
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| Formato: | article |
| Lenguaje: | FA |
| Publicado: |
Shahid Bahonar University of Kerman
2018
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| Materias: | |
| Acceso en línea: | https://doaj.org/article/326ad8ba88ef4ddb8e03c30ad30910b5 |
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| Sumario: | This study aims to examine the value relevance of operating cash flows disclosures (direct method versus indirect method) by the measurement view. The proposed hypotheses state that the division of information sets in the cash flows statement helps to raise the ability of explaining the value of a company. The main hypothesis, followed by two minor subhypotheses, has been tested by the rival models of price level versus return accounting, using the data of 208 companies accepted in the Tehran Stock Exchange in the years 2010-2015. Wald and Voung tests were used to test the hypotheses. Findings showed that the disaggregation of net operating cash flows into its main components (as it is theoretically possible) results in increase in the ability of explaining shares' price and returns of companies. Therefore, the empirical evidence from the Iranian capital market supports superiority of the direct cash flows method to the indirect method in terms of usefulness of decision-making. |
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