IFRS 9 adoption and the value relevance of accounting information: Evidence from the banking sector

Type of the article: Research ArticleThe objective of adopting a new International Financial Reporting Standard (IFRS) is to enhance the value relevance of accounting information. Accounting information has value relevance when the market price of securities reacts to the financial statements. This study aims to analyze the effect of IFRS 9 adoption on the value relevance of financial statements and whether the delayed adoption of IFRS 9 in Indonesia increases the value relevance of accounting information compared to Malaysia, which implemented it immediately. Malaysian banks effectively adopted IFRS 9 in 2018 as required by the International Accounting Standard Board (IASB); meanwhile, Indonesian banks only began to implement it effectively on January 1, 2020. The data used come from conventional banks listed on the Indonesia Stock Exchange for the period 2015–2019 (pre-IFRS 9) and 2020–2024 (post-IFRS 9), and from Bursa Malaysia for the period 2013–2017 (pre-IFRS 9) and 2018–2022 (post-IFRS 9). The results revealed that IFRS 9 adoption increased the value relevance of banking financial statements in both countries. However, Malaysian banks showed a higher increase in the value relevance of financial statements than those of Indonesian banks. These findings indicate that the timing of the new accounting standards adoption has various impacts on investor behavior.