The value-relevance of nonfinancial information: A discussion

Abstract

Amir and Lev (1996) address two interesting issues: the value-relevance of reported financial information for fast-changing, science-based companies and the value-relevance of nonfinancial information incremental to financial information. Using a sample of cellular phone companies, they report that the financial accounting information is only value-relevant after the inclusion of the nonfinancial information and that the nonfinancial information they examine is value-relevant both by itself and incremental to the financial information. I first discuss details specific to the tests conducted by Amir and Lev before discussing some of the implications offered by Amir and Lev.