The value relevance of tangible fixed assets

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Finance from the NOVA – School of Business and Economics

This Work Project aims to verify whether gains from the revaluation of tangible fixed assets in Portugal and Spain are relevant to investors. My sample consists of Portuguese and Spanish listed firms and it spans from the mandatory adoption of IFRS in 2005 until 2009. The results suggest that gains from revaluations are relevant to investors in Portugal and Spain both individually and together and independently of the dependent variable used (March or December share prices). Also, further analysis suggests that revaluations have lower value relevance in firms with high levels of debt which implies an opportunistic motivation.