Companies Using IFRS are no Longer Obliges to Reconcile their Accounting Figures to US GAAP. Is this SEC’S Decision Justified in the Telecommunications Sector?
Juan Palomares Laguna (Universidad Carlos III de Madrid) Enrique Corona Romero (UNED)
Abstract
The aim of this paper is to test whether, the SEC’s decision to allow only companies using IFRS not to reconcile their Equity (E) and Net Profit (NP) to US GAAP is justified. Ourresearch is restricted to the telecommunications sector, and therefore, further research is needed to test whether our result are similar for other sectors. Using a sample of companies belonging to the telecommunications sector, we investigate whether the differences to US GAAP have been reduced after adopting IFRS, and whether these differences are significant. According to our results, the IFRS adoption process has reduced the existing gap to US GAAP. In general, our findings show no significant differences, although there are some specific adjustments, such as business combinations, where the differences were statistically significant. However, we find evidence that the IFRS adoption process has led to a temporary increase in the existing gap to US GAAP for the NP. Therefore, we consider that the SEC’s decision is appropriate. Future research is needed to confirm the tendency found in this study indicating that the differences are decreasing as the effects of the NIIF 1 fade away and that the expected advances in the iure harmonization move to the facto harmonization.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Volume (Year): 12 (2009) Issue (Month): 1 (january-june) Pages: 45-94 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF