The Relevance of Fair Value Revaluation in Measurement of Jordanian Firms Future Performance (An Empirical Study on Jordanian Listed Commercial Banks and Real Estate Companies)

Mohammad Suleiman Aladwan, Mansour Ibrahim Saaydah


The main objective of this study is to investigate whether developments in financial reporting following the international financial reporting standards adoption resulted in financial statement information being more value relevant over time. This study focuses solely on quantitative methods and employs secondary data in addressing the research questions. The relevance of fair value revaluation has been investigated by studying its association with firm's future performance, measured by its operating income and operating cash flow. The theoretical framework of (Aboody et al., 1999) have been used to examine this relationship. A sample of Jordanian firms (consisting of commercial banks and real estate companies) listed in the Amman stock exchange during the 2008–2011 times period has been used. Our findings, based on multiple regression analysis showed that, firm's future performance measured by operating income or operating cash flow is significantly positively associated with current fair value revaluations. This study revealed that fair value revaluation measurements for Jordanian commercial banks and real estate companies have been value relevant during the entire period of this study.


Fair value relevance, future performance, operating income, operating cash flow, Jordan commercial banks, Jordan real estate companies

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