Empirical Study about Equivalence of IFRS, Japanese GAAP, and U.S. GAAP

Vuong test compared the stock price explanation power of earnings capitalization model of 23 U.S. GAAP reporters (14 Japanese companies are included) and 63 U.S. GAAP reconcilers (5 IFRS application companies, 58 its native country GAAP application companies), the book value model, and residual income model. Although the ranking and of dominance of book value model and earnings capitalization model differed from precedence research, the stock price explanation power of the residual income model was most excellent. The explanation power of the U.S. GAAP repoters endured it of the U.S. GAAP reconcilers. According to Vuong test, the contents of an increment information of the U.S. GAAP earnings adjustment difference variable were not checked, but the significant relation was found out between the U.S. GAAP earnings adjustment difference variable and the stock price(5% level). The result of research about these was announced in Accounting, Vol.172, No.2 (August, 2007).