Measurement in accounting and relationship with firm value

The objective of financial statements which are formatted presentation of financial status and financial performance of the companies is to provide fair value information on financial condition, results of operations and cash flow for targetted parties to use in their economic decisions.When taken into consideration that financial statement is the most important source of information for shareholders and managers, all stakeholders about company, the value that could be attributed to the accounting measurement process could be better comprehended. The items of the financial statement, by regulation, have to be stated in national currencies. For that reason it could be asserted that measurement is the process of presenting a company?s assets and liabilities that are determined by year-end accounting procedures in national currencies. Measurement could be defined as ? the process amounts of financial statement items that are tracted in financial statements?. The fact that valuations process affects all items both in balance sheet and income statements, directly or indirectly, makes it important for all target groups (users).In this study has attempted to determine and test level and extent of effects of meaurement method changes in market value of the firms. Secondly, accounting based 16 variables were used to test the predictive power of these variables on firm values.The derived canonical equations have found to predict firms values; 99%,5 accuracy for 6 companies; 98,3% accuracy for 5 companies, 97,1 % for 3 companies, and 96% accuracy for 1 company respectively. Statistical significance test for the canonical analysis was came out to be p<0,05 significance level. Finaly, it was concluded that accounting variable could be used to infer market values of the firms.