EXPLORING THE RELATIONSHIP BETWEEN IFRS 15, EARNINGS VOLATILITY, AND FIRM VALUE: EVIDENCE FROM PAKISTAN

This paper examines how the adoption of IFRS 15 affects the earnings volatility and the firm value in Pakistan, which is an emerging economy. The study investigate the connection between IFRS 15, earnings volatility, and the value of the firm using a sample of 100 non-financial firms listed on the Pakistan Stock Exchange (PSX) between 2015 and 2024. The study used a quantitative research approach to test the hypotheses with the help of panel data regression analysis. Standard deviation of earnings and Q of Tobin which is the standard deviation of firm value are the measures that we use to calculate earnings volatility and firm value respectively. The findings indicate that IFRS 15 implementation is linked with lower earnings volatility, which positively impacts the firm value. The results indicate that IFRS 15 has enhanced the quality of financial reporting in Pakistan resulting in more stable earnings and increase in firm value. The paper is relevant to the body of research of IFRS adoption and its impact on the emerging economies, and it offers policy-based implications to regulators, standard setters, and corporate managers in developing countries.