Accounting standard setters have increasingly shifted toward principles-based regulation to enhance the relevance of financial reporting. We examine the effects of the transition in hedge accounting rules from the bright-line requirements of IAS 39 to the principles-based approach introduced by IFRS 9, using a large sample of listed firms from 17 European countries. Motivated by longstanding concerns that IAS 39 hedge accounting was overly complex and restrictive, we assess whether IFRS 9 improves the value relevance and accounting quality of hedge accounting information. We find that IFRS 9 enhances the decision usefulness of hedge accounting disclosures: hedge accounting effects recognised in profit or loss exhibit significant negative value relevance, while effects recognised in other comprehensive income (OCI) are positively value relevant, indicating improved investor interpretation of risk-management outcomes. In contrast, we find no improvement in accounting quality; earnings persistence declines and earnings smoothing increases following IFRS 9 adoption, while timely loss recognition remains unchanged. Our findings provide cross-country evidence relevant to the IASB’s post-implementation review of IFRS 9 and inform whether principles-based reforms change the value relevance and accounting quality of financial reporting.