The market valuation of IAS versus US-GAAP accounting measures using Form 20-F reconciliations

We investigate the market valuation of earnings and book value amounts prep ared under IAS and US-GAAP to provide evidence for the debate between the U S SEC and NYSE on whether foreign firms should be allowed to list in the US using IAS. We find that the US-GAAP earnings reconciliation adjustment is value-relevant and that US-GAAP amounts are valued differently for market v alue and return models, but not a price-per-share model. We also find that IAS amounts are more highly associated with price-per-share than US-GAAP am ounts, and that US-GAAP amounts are more highly associated with security re turns than IAS amounts. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: M41; G15.