The Value Relevance of Earnings, Book Values, and Other Accounting Information and the Role of Economic Conditions in Value Relevance: A Literature Review*

Lee M. Dunham, Jaime L. Grandstaff

Research output: Contribution to journalArticlepeer-review

Abstract

The value relevance research in accounting offers robust analyses about how the market views accounting information. Although significant work has been done to date in this mature research area, the literature does not fully explain or agree upon the changes in value relevance over time, and the impact of economic conditions on the value relevance of accounting information is a relatively understudied research stream. We review three streams of the value relevance literature: (i) the value relevance of earnings and book values, (ii) the value relevance of other accounting information, and (iii) the role of economic conditions on the value relevance of accounting information. Further, we review the various explanations put forth in the literature to try to explain the variation in value relevance over time. Finally, we provide a limited baseline for the current state of scholarly work and offer insight for future value relevance research.

Original languageEnglish (US)
JournalAccounting Perspectives
DOIs
StateAccepted/In press - 2021

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance

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