Abstract Industrial groups have interactions within and outside groups. In this paper, twelve industrial groups of companies listed in Tehran Stock Exchange are reviewed in order to evaluate linear information dynamics. Conservatism measures of “ratio of sum of price to sum of book value” and “mean of price-to-book ratio” are considered. In sample periods, in order to remedy the effects of special factors in sample industries, later ratio is de-trended. For controlling effects of each industry, inflation, and some other factors on the various industry indices, two measures of “average annual difference between price and book value” and “each industry index” are considered. Industry analysis shows that "sum of price to sum of book value" criterion has a significant correlation with the average of market value to book value and the correlation would be stronger if using the de-trended criteriun. Finally, comparing scaled variables on the average annual difference between price and book value, it concluded that scaled variables based on the index of each industry led to a much stronger coefficient of valuation models. Therefore, for assessment and analysis of linear information dynamics in industrial groups (including environmental factors such as conservatism in accounting policies, industry, stock market indices, cost of capital rate, inflation, the policy of dividend distribution, past and present of book value and securities) can be used for developing residual income valuation models.

Abstract Introduction of an Optimized Model for Fixed Assets Classification in the Balance Sheet (Case Study: Alimentary Production Corporations in Tehran Stock Exchange) Mohammad Ali Aghaei1, Malihe Moradi2 1- Associated Professor, Department of Accounting, Faculty of Management & Economy, Tarbiat Modares University, Tehran, Iran 2- M.A. Student in Accounting, Department of Accounting, Faculty of Management & Economy, Tarbiat Modares University, Tehran, Iran. Received: 23 /5/2010 Accept: 9/3/2011 This research is an attempt to suggest a new financial statement analysis method. In this method, the value of accounting information in balance sheet is measured by information theory. Henry Thiel (1969), applying the information theory in accounting; offered a new thought in financial statement analysis. He measured the value of financial statement information by using entropy. Entropy is a logarithmic measure of the rate of transfer of information in a particular message or language. In this research, we attempted to measure the value of information in alimentary corporations’ balance sheet by using entropy and suggested a new method for optimizing fixed assets classification, which increases the information value of those balance sheets. The results showed that if firms present fixed assets information by detail in the balance sheet, the entropy of information will increase and the high value of transmitted information will improve decision making by users of financial statements.