Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241780 
Year of Publication: 
2018
Citation: 
[Journal:] China Journal of Accounting Research [ISSN:] 1755-3091 [Volume:] 11 [Issue:] 4 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2018 [Pages:] 255-278
Publisher: 
Elsevier, Amsterdam
Abstract: 
Whether proportionate consolidation (PC) or the equity method (EM) provides more informative financial statements is a controversial issue. This study uses data from listed companies in Hong Kong to investigate the value relevance of the EM compared with PC during 2005-2008 when the local word-for-word equivalent HKAS 31 offered the same options. The results of this study provide evidence that PC does not offer higher value relevance than the EM. PC's horizontal aggregation of a portion of the operations, assets and liabilities of the jointly controlled entities with those of the venturer is less informative to investors than the EM's vertical aggregation.
Subjects: 
Value relevance
Proportional consolidation method
Equity method
Financial statements
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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