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The value relevance of the foreign currency translation differences : a study of multinational oil and gas companies in Australia

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  • Svetalna Vlady

    (Department of Accounting, Finance and Economics, Business School, Griffith University, Australia)

Abstract

This paper investigates the relationship between foreign currency translation differences and changes in firm’s market equity value of the Australian multinational firms in the oil and gas industry. The paper empirically examines this relationship under the former Australian accounting standard AASB 1012 “Foreign Currency Translation”. The paper thereby supports the new accounting standard AASB 121 “The Effects of Changes in Foreign Exchange Rates” that adopted a functional currency approach. Since, AASB121 is equivalent to International Financial Reporting Standard IFRS 21 this paper could be useful to understand the effects of foreign currency translation process not only on Australian firms but worldwide

Suggested Citation

  • Svetalna Vlady, 2008. "The value relevance of the foreign currency translation differences : a study of multinational oil and gas companies in Australia," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(10), pages 52-63, April.
    • Handle: RePEc:aio:rteyej:v:1:y:2008:i:10:p:52-63
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    References listed on IDEAS

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    1. repec:bla:jfinan:v:44:y:1989:i:1:p:167-81 is not listed on IDEAS
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    3. Canals, Jordi, 1994. "Competitive Strategies in European Banking," OUP Catalogue, Oxford University Press, number 9780198773504.
    4. Dhaliwal, Dan & Subramanyam, K. R. & Trezevant, Robert, 1999. "Is comprehensive income superior to net income as a measure of firm performance?1," Journal of Accounting and Economics, Elsevier, vol. 26(1-3), pages 43-67, January.
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    More about this item

    Keywords

    International Accounting Standards; Current and Temporal Methods; Foreign Translation Differences; Functional Currency; Value Relevance;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F3 - International Economics - - International Finance

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