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NTU Management Review Vol. 35 No. 2 Oct. 2025

Table 8 (continued) Additional Controls for Country-Level Variables

Panel B: Significance Tests of Sum of Coefficients
Coef. t-stat p-value Coef. t-stat p-value
UK + UK×POST -0.260 -0.93 0.353
UK + UK×YEAR_0506 0.875 1.61 0.109
UK + UK×YEAR_0708 0.044 0.11 0.912
UK + UK×YEAR_0910 0.138 0.23 0.820
UK + UK×YEAR_1112 -0.849 -2.20 0.029
UK + UK×YEAR_1314 -0.548 -1.84 0.068
Notes: This table presents the results of the multivariate analysis that includes additional country-level
variables. Panel A presents the regression results, and Panel B details whether the sums of
the coefficients of interest are significant. DISPERSION is the dispersion of analyst forecasts,
measured as the standard deviation of individual analysts’ forecasts scaled by the absolute
value of the mean EPS forecast. POST equals one after 2005 and zero otherwise. In Column
(2), we replace POST with a vector of time-period indicator variables: YEAR_0506, YEAR_0708,
YEAR_0910, YEAR_1112, and YEAR_1314. YEAR_0506 equals one for the period 2005-
2006 and zero otherwise; all other time-period indicator variables are defined accordingly. The
t-statistics are calculated using robust standard errors clustered at the firm level.

7. Conclusion

This paper examines how the fair value and historical cost models affect analyst
behavior with a focus on real estate firms domiciled in the US and the UK between 2002
and 2014, leveraging the difference in accounting standards for investment properties.

More specifically, we exploit the fact that UK investment property firms report their
properties at fair value, while their US counterparts report them at historical cost.
The UK’s adoption of IFRS in 2005 allows for an analysis of whether the partial fair value
model (under UK domestic standards) and the full fair value model (under IFRS) differ in
their effects on analyst behavior. Moreover, using the real estate industry rather than the

financial industry allows us to better capture the differential effect of these two reporting
models, as firms in the real estate industry are more homogeneous, meaning that the results
are less likely to be explained by confounding factors.

First, we find that, upon the UK’s shift from the partial fair value reporting model
under domestic standards to the full fair value reporting model under IFRS, UK firms
exhibit an immediate increase in forecast dispersion. However, this increase is temporary

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