Page 8 - 35-2

Forecast Properties: Evidence from Real Estate Firms” in the field of Accounting by
Ye and Yu examines whether changes in accounting standards affect analyst forecast
properties. Using a sample of US and UK real estate firms, the study reveals that a shift
from the partial fair value reporting model (UK domestic standards) to the full fair value
reporting model (IFRS) temporarily increases forecast dispersion; nonetheless, this
increase disappears several years after adoption. They also find that, when both income
statements and balance sheets are reported under the full fair value model, financial
statements become more straightforward, reducing analysts’ forecast revision response
time; however, this reduction only becomes pronounced several years following IFRS
adoption, suggesting that the effect is not immediate. Moreover, a revisiting of a prior
study shows that the increase in forecast error is temporary in the post-IFRS period.
Overall, this study reports that the change in accounting standards has a time-varying
effect on analyst behavior.

Hsiou-Wei Lin
San-Lin Chung
Chih-Ping Wei
Tay-Chang Wang