The value-relevance of disclosed summarised financial information of listed associates

While prior research considers limited elements of the summarised financial information reported for equity accounted associates under IAS 28, it does not address the collective or incremental value-relevance of these disclosures. Therefore, this study investigates the incremental value-relevance of all required elements of disclosed summarised financial information for listed associates, and controls for reported fair values. Findings suggest that individual elements of these summarised disclosures are sometimes incrementally value-relevant, but that elements have the greatest incremental value-relevance as a group. These findings suggest that investors value a firm's investments in listed associates at a self-developed intrinsic value, rather than using the market value (or fair value) of that associate directly. Therefore, underlying accounting information of listed associates remains value-relevant, even when alternative market-based valuations are available.