The Value Relevance of Fair Value Accounting to Market Returns

Abstract: This thesis strives to investigate the value relevance of fair value accounting stipulated by the IFRS standards IAS 40 and IAS 41. This is done by using earnings level and change in earnings level as explanatory variables for share returns in the Swedish and Finnish Forestry and Real Estate industries. Aside from investigating on an aggregated level, we also divide the companies based on their business model to study potential differences in value relevance of fair value accounting.