An empirical investigation of the UK stock market response to the implementation of SSAP 20 "Foreign Currency Translation"


This study presents an empirical investigation of the UK stock market response to the im-plementation of the UK Statement of Standard Accounting Practice (SSAP) No. 20 “Foreign Cur-rency Translation” (issued in April 1983). Such an empirical investigation has not yet been under-taken for the UK. Our results show that the stock market generally appeared to have anticipatedthe implementation of SSAP 20. For the aggregate set of adopters, we found a positive stock mar-ket response in the official year of adoption, reflecting the appreciation of the income-stabilisingeffects of the standard. This paper also presents a cross-sectional analysis that tests for a relation-ship between the stock returns and the accounting measures of those firms that adopted SSAP 20.We found a significant relation between the stock returns and the related accounting measures inthe actual adoption period of the aggregate set of adopters. This study generally focuses on theinterpretation of the financial impacts of the various accounting choices of firms within their fi-nancial and economic environments.

Divisions: College of Business and Social Sciences > Aston Business School > Accounting
Additional Information: © The author(s) 2019. This publication is an open access article.
Uncontrolled Keywords: translation gains and losses,SSAP 20,early,normal and late adopters,stock market reaction
Publication ISSN: 1812-9358
Last Modified: 12 Feb 2024 08:05
Date Deposited: 20 Oct 2009 14:23
Full Text Link:
Related URLs: https://busines ... ncy-translation (Publisher URL)
PURE Output Type: Article
Published Date: 2005
Authors: Iatridis, George
Joseph, Nathan L. (ORCID Profile 0000-0002-2182-0847)



Version: Published Version

| Preview

Export / Share Citation


Additional statistics for this record