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Impact Of The Transition To Ifrs For The Romanian Listed Companies In Financial Distress

Author

Listed:
  • Costel ISTRATE

    () (Alexandru Ioan Cuza University, 11 Carol I Blvd, Iasi, Romania)

  • Ioan Bogdan ROBU

    () (Alexandru Ioan Cuza University, 11 Carol I Blvd, Iasi, Romania)

  • Mihai CARP

    () (Alexandru Ioan Cuza University, 11 Carol I Blvd, Iasi, Romania)

Abstract

The transition to IFRS of the Romanian listed companies enables us to provide a comparison of some accounting data reported in the same period and that have been obtained according to different accounting regulations: RAS vs. IFRS. The aim of our paper is to establish if the listed companies in financial distress report a trend of changes due to the transition to IFRS that is different to the one established for the performant companies. Based on the data corresponding to the 2011 financial year (with available RAS and IFRS information), we have calculated Gray’s comparability index (for a series of financial indicators) in the case of the two groups of companies (one in financial distress and a performant one) and we have statistically tested the existence of significant differences between the values of the index for the two company categories. We have found out that some indicators evolve in the same manner (especially the balance sheet structure indexes), others maintain the same trend, but the significance of the variances are different (ROS, ROA, ROE and OI), and, finally, for another series of indicators, the trend of the change caused by the IFRS transition is different for the two groups of companies (leverage and equity).

Suggested Citation

  • Costel ISTRATE & Ioan Bogdan ROBU & Mihai CARP, 2015. "Impact Of The Transition To Ifrs For The Romanian Listed Companies In Financial Distress," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 15, pages 83-102, June.
  • Handle: RePEc:aic:revebs:y:2015:j:15:istratec
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    References listed on IDEAS

    as
    1. Dionysios Polemis & Dimitrios Gounopoulos, 2012. "Prediction of distress and identification of potential M&As targets in UK," Managerial Finance, Emerald Group Publishing, vol. 38(11), pages 1085-1104, September.
    2. Costel Istrate, 2014. "Impact of IFRS on the accounting numbers of Romanian listed companies," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 13(3), pages 466-491, September.
    3. Istrate Costel, 2013. "Impact of IFRS on Accounting Data – Gray Index of Conservatism Applied to Some European Listed Companies," Scientific Annals of Economics and Business, Sciendo, vol. 60(2), pages 1-19, December.
    4. Street, Donna L. & Nichols, Nancy B. & Gray, Sidney J., 2000. "Assessing the Acceptability of International Accounting Standards in the US: An Empirical Study of the Materiality of US GAAP Reconciliations by Non-US Companies Complying with IASC Standards," The International Journal of Accounting, Elsevier, vol. 35(1), pages 27-63, March.
    5. Costel Istrate, 2014. "Impact Of Ifrs On The Accounting Numbers Of Romanian Listed Banks," The Journal of Accounting and Management, Danubius University of Galati, issue 2, pages 45-49, August.
    6. Mihaela Ionascu & Ion Ionascu & Marian Sacarin & Mihaela Minu, 2014. "IFRS adoption in developing countries: the case of Romania," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 13(2), pages 311-350, June.
    7. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    8. repec:eee:jocaae:v:7:y:2011:i:1:p:1-17 is not listed on IDEAS
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    More about this item

    Keywords

    Impact of IFRS; Gray index of comparability; Romanian listed companies; companies in financial distress;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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