IFRS adoption and value relevance of accounting information in the V4 region

Figures & data

Table 1. Macroeconomic and capital market data.

	Nom. GDP per capita	Real GDP per capita	Exports on GDP (%)	Foreign turnover (%)	No of listed firms	Market cap to GDP (%)
Czech Republic	20,120	27,797	71.0	46.2	20	10.8
Hungary	14,100	22,234	79.5	48.5	45	18.0
Poland	13,650	22,639	56.2	31.3	806	29.8
Slovakia	16,860	20,946	85.4	51.4	49	2.9
Bulgaria	8,840	16,414	55.3	34.6	259	25.3
Croatia	12,400	19,233	42.0	32.5	103	38.9
Romania	11,360	21,504	37.3	52.8	83	10.3
Slovenia	22,310	26,540	77.9	33.4	27	15.8
Greece	15,440	18,659	32.0	17.1	176	27.0
Turkey	7,510	18,407	28.7	N/A	371	33.0

Source: Eurostat Data Explorer and World Bank Financial Development Indicators. Nominal GDP in €; Real GDP constant in €of 2020. Foreign turnover = turnover by subsidiaries under foreign control divided by aggregate turnover of the economy. All data for 2020 except for Foreign turnover which is for 2018.

Table 2. Descriptive statistics.

CZE (n = 99)	Mean	Std. dev.	Min.	Median	Max.
Revenue	3,183,061	3,501,734	121,971	1,370,542	11,966,044
Net income	351,246	536,120	–1,382,638	219,576	1,955,126
Total assets	35,553,430	64,351,877	235,847	3,715,763	220,659,433
Equity	3,607,030	3,974,715	77,479	2,314,646	13,871,914
Share return	14.5%	54.0%	–83.6%	11.7%	440.1%
EPS	5.6	11.2	–5.4	2.1	48.3
BVPS	29.8	35.4	1.0	17.8	133.9
CFOPS	9.1	20.0	–49.5	3.4	117.6
HUN (n = 162)	Mean	Std. dev.	Min.	Median	Max.
Revenue	1,818,681	3,941,571	–5,754	61,390	19,269,915
Net income	96,618	247,233	–843,549	2,285	1,250,717
Total assets	7,311,080	16,277,498	0	113,883	75,696,000
Equity	2,209,336	6,672,624	–15,923	47,624	63,789,000
Share return	55.2%	308.7%	–74.1%	4.2%	3241.2%
EPS	0.3	0.7	–1.2	0.1	3.5
BVPS	39.4	207.6	–0.9	1.9	2 218.3
CFOPS	4.5	19.7	–19.4	0.4	145.1
POL (n = 277)	Mean	Std. dev.	Min.	Median	Max.
Revenue	3,084,830	4,518,879	295	1,659,936	28,769,966
Net income	238,520	379,208	–1,389,358	131,942	2,711,539
Total assets	10,713,053	13,236,512	4,796	6,306,308	76,025,159
Equity	2,517,186	2,395,965	–222,942	1,810,044	10,807,299
Share return	19.9%	65.0%	–79.5%	9.7%	656.8%
EPS	2.7	8.0	–6.0	0.7	62.6
BVPS	17.8	37.1	–3.2	8.2	319.2
CFOPS	3.4	13.9	–78.8	0.8	114.6
SVK (n = 66)	Mean	Std. dev.	Min.	Median	Max.
Revenue	845,365	1,480,090	11	102,825	4,732,741
Net income	43,083	77,440	–75,756	4,802	251,677
Total assets	2,688,057	4,352,657	36,941	404,804	14,970,876
Equity	549,173	638,000	–41,911	190,285	1,693,259
Share return	7.4%	36.4%	–75.0%	4.1%	144.3%
EPS	2.2	6.2	–16.1	0.2	13.6
BVPS	33.4	40.9	–26.8	12.9	125.8
CFOPS	–3.0	28.8	–192.3	0.0	48.2

Source: Own calculations based on Refinitiv Eikon with Datastream data. Revenue, Net income, Total assets, Equity in EUR thousand; Earnings & Book Value, and Operating Cash Flows per share in EUR. Amounts converted to EUR using ‘period-end FX rates’ directly from the Refinitiv Eikon database.

Table 3. Correlation matrices.

CZE	Return	EPS	ΔEPS	CFOPS	ΔCFOPS	BVPS	ΔBVPS
Return	1.00	0.32**	0.09	0.27**	−0.05	0.22*	−0.36***
EPS		1.00	0.06	0.52***	0.12	0.30**	0.24*
ΔEPS			1.00	0.09	0.44***	0.15	0.39***
CFOPS				1.00	0.40***	0.55***	0.05
ΔCFOPS					1.00	0.08	0.59***
BVPS						1.00	0.07
ΔBVPS							1.00
HUN	Return	EPS	ΔEPS	CFOPS	ΔCFOPS	BVPS	ΔBVPS
Return	1.00	0.32***	0.31***	0.35***	0.37***	0.32***	0.06
EPS		1.00	0.85***	0.00	0.04	0.00	0.01
ΔEPS			1.00	−0.02	0.01	−0.02	0.01
CFOPS				1.00	0.10	0.85**	−0.26***
ΔCFOPS					1.00	0.26***	0.06
BVPS						1.00	0.15
ΔBVPS							1.00
POL	Return	EPS	ΔEPS	CFOPS	ΔCFOPS	BVPS	ΔBVPS
Return	1.00	0.10	0.16**	−0.01	−0.02	0.02	0.32**
EPS		1.00	0.62***	0.06	0.01	0.07	0.66***
ΔEPS			1.00	0.09	−0.01	0.10	0.50***
CFOPS				1.00	0.38***	0.68***	0.19***
ΔCFOPS					1.00	0.04	0.08
BVPS						1.00	0.29***
ΔBVPS							1.00
SVK	Return	EPS	ΔEPS	CFOPS	ΔCFOPS	BVPS	ΔBVPS
Return	1.00	0.06	−0.10	0.19	0.11	0.11	−0.07
EPS		1.00	0.39**	−0.28*	−0.66***	0.33**	0.67***
ΔEPS			1.00	−0.26*	−0.56***	0.09	0.34**
CFOPS				1.00	0.49***	−0.08	−0.75***
ΔCFOPS					1.00	−0.21	−0.68***
BVPS						1.00	−0.09
ΔBVPS							1.00

*p-value < 0.05; **p-value < 0.01; ***p-value < 0.001.

Source: Own calculations.

Table 4. Regression results.

CZE	Model 1A	Model 1B	Model 2A	Model 2B	Model 3A	Model 3B	Model 4A	Model 4B
Constant	0.087 (0.064)	0.085 (0.065)	0.029 (0.074)	0.001 (0.075)	–0.020 (0.095)	–0.059 (0.088)	–0.021 (0.092)	–0.046 (0.078)
EPS	0.905** (0.267)	0.891** (0.269)					0.679* (0.309)	1.390*** (0.284)
ΔEPS		0.207 (0.249)						0.540* (0.239)
CFOPS			0.525** (0.177)	0.644** (0.191)			0.184 (0.232)	–0.330 (0.245)
ΔCFOPS				–0.323 (0.201)				0.563* (0.244)
BVPS					0.189* (0.081)	0.208** (0.076)	0.094 (0.093)	0.142 (0.082)
ΔBVPS						–0.379*** (0.094)		–0.749*** (0.118)
F-test	11.46**	6.06**	8.87**	5.76**	5.52*	11.22***	4.99**	11.37***
R^2adjusted	9.6%	9.4%	7.4%	8.9%	4.4%	17.3%	10.9%	38.8%
HUN	Model 1A	Model 1B	Model 2A	Model 2B	Model 3A	Model 3B	Model 4A	Model 4B^#
Constant	0.446* (0.190)	0.407* (0.188)	0.357 (0.272)	0.349 (0.253)	0.354 (0.277)	0.357 (0.278)	0.253 (0.190)
EPS	3.261*** (0.500)	2.221* (0.973)					2.929*** (0.478)
ΔEPS		1.296 (0.968)
CFOPS			0.039*** (0.008)	0.035*** (0.008)			0.031* (0.015)
ΔCFOPS				0.085*** (0.018)
BVPS					0.005*** (0.001)	0.005*** (0.001)	0.001 (0.002)
ΔBVPS						0.001 (0.001)
F-test	42.39***	23.53***	22.07***	24.19***	19.29***	9.60***	21.48***
R^2adjusted	20.5%	21.9%	11.6%	22.4%	10.2%	9.6%	27.6%
#The model is not estimated due to the multicollinearity issue caused by the strong correlation between CFOPS and BVPS (the correlation coefficient 0.85 – see Table 1 – leads to a VIF coefficient around 10).
POL	Model 1A	Model 1B	Model 2A	Model 2B	Model 3A	Model 3B	Model 4A	Model 4B
Constant	0.180** (0.055)	0.211*** (0.057)	0.195*** (0.056)	0.196*** (0.056)	0.200** (0.060)	0.178** (0.056)	0.182** (0.063)	0.258*** (0.060)
EPS	0.322 (0.326)	–0.305 (0.414)					0.318 (0.328)	–1.616*** (0.467)
ΔEPS		0.846* (0.356)						0.541 (0.349)
CFOPS			0.026 (0.145)	0.013 (0.157)			0.042 (0.199)	0.079 (0.214)
ΔCFOPS				0.031 (0.136)				–0.118* (0.137)
BVPS					–0.001 (0.034)	–0.044 (0.035)	–0.001 (0.047)	–0.073 (0.048)
ΔBVPS						1.083*** (0.218)		1.622*** (0.295)
F-test	1.01	3.31*	0.06	0.06	0.03	12.41***	0.35	6.24***
R^2adjusted	0.1%	1.6%	0.0%	0.0%	0.0%	7.6%	0.0%	10.2%
SVK	Model 1A	Model 1B	Model 2A	Model 2B	Model 3A	Model 3B	Model 4A	Model 4B
Constant	0.076 (0.046)	0.079 (0.046)	0.087 (0.046)	0.086 (0.047)	0.071 (0.046)	0.073 (0.046)	0.089 (0.047)	0.086 (0.048)
EPS	0.035 (0.072)	0.067 (0.077)					0.054 (0.078)	–0.040 (0.160)
ΔEPS		–0.055 (0.053)						–0.007 (0.060)
CFOPS			0.044 (0.029)	0.042 (0.033)			0.052 (0.030)	0.101 (0.062)
ΔCFOPS				0.003 (0.026)				0.035 (0.033)
BVPS					0.012 (0.015)	0.011 (0.015)	0.011 (0.015)	0.029 (0.022)
ΔBVPS						–0.010 (0.021)		0.081 (0.068)
F-test	0.24	0.67	2.36	1.17	0.69	0.46	1.25	1.03
R^2adjusted	0.0%	0.0%	2.1%	0.5%	0.0%	0.0%	1.2%	0.3%
All countries	Model 1A	Model 1B	Model 2A	Model 2B	Model 3A	Model 3B	Model 4A	Model 4B
Constant	0.513*** (0.129)	0.504*** (0.129)	0.354** (0.127)	0.347** (0.120)	0.354** (0.129)	0.355** (0.129)	0.303* (0.124)	0.349** (0.110)
EPS	1.209*** (0.205)	1.001*** (0.247)					1.210*** (0.193)	1.006*** (0.207)
ΔEPS		0.281 (0.201)						0.395* (0.168)
CFOPS			0.040** (0.005)	0.036*** (0.004)			0.032*** (0.009)	0.123*** (0.012)
ΔCFOPS				0.086*** (0.010)				0.113*** (0.010)
BVPS					0.005*** (0.001)	0.005*** (0.001)	0.001 (0.001)	–0.011*** (0.002)
ΔBVPS						0.001 (0.001)		0.007*** (0.001)
CZE dummy	–0.448* (0.208)	–0.429* (0.209)	–0.221 (0.203)	–0.215 (0.191)	–0.218 (0.205)	–0.219 (0.205)	–0.250 (0.197)	–0.296 (0.176)
POL dummy	–0.386* (0.162)	–0.367* (0.162)	–0.161 (0.158)	–0.155 (0.149)	–0.160 (0.160)	–0.161 (0.160)	–0.182 (0.154)	–0.223 (0.137)
SVK dummy	–0.372 (0.242)	–0.377 (0.242)	–0.266 (0.236)	–0.268 (0.222)	–0.278 (0.238)	–0.279 (0.238)	–0.154 (0.229)	–0.198 (0.204)
F-test	10.32***	8.66***	20.16***	33.60***	17.36***	13.87***	21.18***	35.58***
R^2adjusted	5.8%	6.0%	11.3%	21.33%	9.8%	9.7%	16.8%	34.1%

*p-value < 0.05; **p-value < 0.01; ***p-value < 0.001.

Source: Own calculations.