In the value relevance literature, there are two basic types of valuation models that have been widely used in previous studies. Pricing model that tests the relationship between the firm's market value and accounting earnings and book value of equity. As seen in equation 1, based on Ohlson (1995), the model expresses the value of the firm as a function of its earnings and the book value of equity. The other type of value relevance assessment model is the return model, which describes the relationship between stock returns and accounting earnings. The value relevance of accounting information studies using the returns-earnings association is motivated by the seminal work of Ball and Brown (1968). Subsequently, Easton and Harris (1991) popularized a specific version of the annual return model that includes both income levels and changes in earnings. The performance model used in this study, based on Easton and Harris (1991), is given in equation 2.Chen et al. (2001) discuss two advantages of price models over return models. When stock markets frontload any component of accounting earnings and incorporate the frontloading into the initial stock price—that is, the prices that drive earnings—return models skew earnings coefficients toward zero. On the other hand, Kothari and Zimmerman (1995) argue that pricing models produce unbiased earnings coefficients because stock prices reflect the cumulative effect of earnings information. Return models only assess the value relevance of accounting earnings, while pricing models based on Ohlson (1995) show how the market value of a firm is related to both accounting earnings and the book value of equity. Additionally, the use of the Ohlson model will broaden the scope of assessing value relevance in both the income statement and balance sheet. However, Kothari and Zimmerman (1995) argue that retur…… middle of paper…… ernal/NP/rosc/rosc.aspxSamarasekera, N., C. Milicent, and T. Ann. 2012. IFRS and accounting quality: the impact of application. Business School Working Paper, University of Western Australia. Tsalavoutas, I., A. Paul, and L. Evans. 2012. The transition to IFRS and the value relevance of financial statements in Greece. The British Accounting Review 44: 262-277. Wan Ismail, A. W., A. K. Khairul, T. Zijl, and K. Dunstan. 2013. Earnings quality and the adoption of IFRS-based accounting standards: Evidence from an emerging market. Asian Review of Accounting, 21 (1): 53-73.Widodo Lo, E. 2012. The value relevance of accounting information in the transition to IAS/IFRS: the case of Indonesia. Jurnal Akuntansi & Manajemen 23 (2): 139-151.Van Tendeloo, B. and A. Vanstraelen. 2005. Earnings Management under German GAAP and IFRS. European audit, 14 (1): 155-180.