The persistence of earnings and earnings components after the adoption of IFRS
Abstract
Purpose – This paper seeks to examine the persistence of earnings and earnings components after the adoption of International Financial Reporting Standards (IFRS). Design/methodology/approach – The study analyses two years before and two years after the adoption of IFRS in order to examine whether the adoption of IFRS materially affects the persistence, as well as the explanatory power of earnings and earnings components. Findings – The results confirm that disaggregating reported earnings into operating income, non-operating income and extraordinary charge and credit, captures differences in the information content of the underlying events. Consequently, earnings disaggregation can be used to improve prediction of future profitability. The results suggest that IFRS measurement and reporting guidelines do not seem to improve the persistence of earnings and earnings components. Originality/value – This is the first study that examines whether the mandatory adoption of IFRS has an impact on the information content of earnings components for future profitability.Download Info
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic Info
Article provided by Emerald Group Publishing in its journal Managerial Finance.
Volume (Year): 36 (2010)
Issue (Month): 11 (November)
Pages: 969-980
Contact details of provider:
Web page: http://www.emeraldinsight.com
Order Information:
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Email:
Web: http://www.emeraldinsight.com/mf.htm
Related research
Keywords: Earnings; Financial reporting; Greece;References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Murphy, Ann B., 1999. "Firm Characteristics of Swiss Companies that Utilize International Accounting Standards," The International Journal of Accounting, Elsevier, vol. 34(1), pages 121-131.
- Ali, Ashiq & Zarowin, Paul, 1992. "Permanent versus transitory components of annual earnings and estimation error in earnings response coefficients," Journal of Accounting and Economics, Elsevier, vol. 15(2-3), pages 249-264, August.
- Mary E. Barth & Wayne R. Landsman & Mark H. Lang, 2008. "International Accounting Standards and Accounting Quality," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 467-498, 06.
- Holger Daske & Luzi Hail & Christian Leuz & Rodrigo Verdi, 2008. "Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1085-1142, December.
- Ding, Yuan & Hervé, Stolowy & Hope, Ole-Kristian & Jeanjean, Thomas, 2005.
"Differences between domestic accounting standards and IAS: measurement, determinants and implications,"
Les Cahiers de Recherche
826, HEC Paris.
- Ding, Yuan & Hope, Ole-Kristian & Jeanjean, Thomas & Stolowy, Herve, 2007. "Differences between domestic accounting standards and IAS: Measurement, determinants and implications," Journal of Accounting and Public Policy, Elsevier, vol. 26(1), pages 1-38.
- Papadaki, Afroditi, 2005. "Discussion of "Why do national GAAP differ from IAS? The role of culture"," The International Journal of Accounting, Elsevier, vol. 40(4), pages 351-358.
- Harris, Mary S. & Muller III, Karl A., 1999. "The market valuation of IAS versus US-GAAP accounting measures using Form 20-F reconciliations1," Journal of Accounting and Economics, Elsevier, vol. 26(1-3), pages 285-312, January.
- Tendeloo, Brenda van & Vanstraelen, Ann, 2005. "Earnings Management under German GAAP versus IFRS," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18432, Maastricht University.
- Brenda van Tendeloo & Ann Vanstraelen, 2005. "Earnings management under German GAAP versus IFRS," European Accounting Review, Taylor and Francis Journals, vol. 14(1), pages 155-180.
- Tendeloo, Brenda van & Vanstraelen, Ann, 2005. "Earnings Management under German GAAP versus IFRS," Open Access publications from Maastricht University urn:nbn:nl:ui:27-23113, Maastricht University.
Citations
Lists
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.Statistics
Access and download statisticsCorrections
When requesting a correction, please mention this item's handle: RePEc:eme:mfipps:v:36:y:2010:i:11:p:969-980For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Harris).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.