Timely Loss Recognition and the Value Relevance of the Romanian Listed Companies Considering the IFRS Approach

The Romanian listed entities had to report their individual financial statements under International Financial Reporting Standards (IFRS) from 2012. As at international level the adoption of the new regulation created mixed effects, we investigate how the timely loss recognition and the value relevance changed in Romania after their implementation. The present research looks both at timely loss recognition and at value relevance for Romanian entities that are listed on the Bucharest Stock Exchange. The research is conducted on a four year period of time. The research is based on logit and panel data analysis. The results provide evidence that there seems to be more timely loss recognition and more value relevance for Romanian listed entities after the adoption of the IFRS in the individual financial statements. As a consequence, there is more accurate accounting information on the Romanian market which might trigger higher confidence both for the stakeholders of the company and for the foreign investors.