Author(s): Bisan Khalil Mohammad Almasri
Many research tested the value-relevance and value-reliability of earnings (Finger 1994; Kross & Kim 2005; Altamuro et al., 2005; Bandyopadhyay et al., 2010; Lee & Yoon 2012). But literature is divided into two perspectives, some support the fair value and others do not. This motivates the researcher to provide new evidence of the effect of the impairment accounting on the earnings informativness, with adding a new dimension for the earnings predictability from Jordan. The results of this research show that there is a difference between firms who adopt IAS36 and firms that do not adopt the standard. Thus, one of the rules of fair value accounting, and IAS36 is to provide information that has more value relevance and reliability to help users in their decision. Also, there is no trade-off between relevance and reliability in explaining the earning-share price relationship, and not the value relevance nor the reliability play any role in this association, which shows firms that adopt IAS36 and firms who do not adopt IAS36 have the same earning usefulness. This research and many others support the new era of the fair value based on the evidence collected from many countries and for many periods, but this new regulation is mixed regarding the application pressure.