IDEAS home Printed from https://ideas.repec.org/a/aic/revebs/y2015j15istratec.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: http://rebs.feaa.uaic.ro/articles/pdfs/192.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. Clarkson, Peter & Hanna, J. Douglas & Richardson, Gordon D. & Thompson, Rex, 2011. "The impact of IFRS adoption on the value relevance of book value and earnings," Journal of Contemporary Accounting and Economics, Elsevier, vol. 7(1), pages 1-17.
    5. 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.
    6. Sidney Gray & Cheryl Linthicum & Donna Street, 2009. "Have ‘European’ and US GAAP measures of income and equity converged under IFRS? Evidence from European companies listed in the US," Accounting and Business Research, Taylor & Francis Journals, vol. 39(5), pages 431-447.
    7. Gray, Sj, 1980. "The Impact Of International Accounting Differences From A Security-Analysis Perspective - Some European Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 64-76.
    8. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Webber, Sarah J. & Nichols, Nancy B. & Street, Donna L. & Cereola, Sandra J., 2013. "Non-GAAP adjustments to net income appearing in the earnings releases of the S&P 100: An analysis of frequency of occurrence, materiality and rationale," Research in Accounting Regulation, Elsevier, vol. 25(2), pages 236-251.
    2. 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.
    3. Ioan-Bogdan ROBU & Costel ISTRATE & Ionut Viorel HERGHILIGIU, 2019. "The Use of Audit Opinion in Estimating the Financial Reporting Transparency Level," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 17(153), pages 1-79.
    4. Ioannis Tsalavoutas & Lisa Evans, 2010. "Transition to IFRS in Greece: financial statement effects and auditor size," Managerial Auditing Journal, Emerald Group Publishing, vol. 25(8), pages 814-842, September.
    5. Maria Carmen HUIAN, 2015. "Impact Of The Ifrs Adoption On Financial Assets And Liabilities. Empirical Evidence From Bucharest Stock Exchange," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 16, pages 69-90, December.
    6. Lueg, Rainer & Punda, Pawel & Burkert, Michael, 2014. "Does transition to IFRS substantially affect key financial ratios in shareholder-oriented common law regimes? Evidence from the UK," Advances in accounting, Elsevier, vol. 30(1), pages 241-250.
    7. Michael Dobler & Nina Günther, 2008. "Stand der de facto-Konvergenz von IFRS und US-GAAP — Eine empirische Analyse der Überleitungsrechnungen nach Form 20-F von Unternehmen aus der Europäischen Union," Schmalenbach Journal of Business Research, Springer, vol. 60(8), pages 809-845, December.
    8. Shiheng Wang & Michael Welker, 2011. "Timing Equity Issuance in Response to Information Asymmetry Arising from IFRS Adoption in Australia and Europe," Journal of Accounting Research, Wiley Blackwell, vol. 49(1), pages 257-307, March.
    9. Peng, Songlan & Tondkar, Rasoul H. & van der Laan Smith, Joyce & Harless, David W., 2008. "Does Convergence of Accounting Standards Lead to the Convergence of Accounting Practices?: A Study from China," The International Journal of Accounting, Elsevier, vol. 43(4), pages 448-468, December.
    10. repec:dau:papers:123456789/2091 is not listed on IDEAS
    11. Visani, Franco & Di Lascio, F. Marta L. & Gardini, Silvia, 2020. "The impact of institutional and cultural factors on the use of non-GAAP financial measures. International evidence from the oil and gas industry," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 40(C).
    12. Ioan-Bogdan ROBU & Ionut Viorel HERGHILIGIU & Bogdan BUDEANU & Sorin CHIRU, 2019. "Assessing Comparability of Accounting Information Using Panel Data Analysis," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 17(155), pages 441-441.
    13. Salma Damak-Ayadi, 2007. "De L'Efficacite Des Mesures De Convergence Pour Preparer Le Passage Aux Ias/Ifrs En France," Post-Print halshs-00544879, HAL.
    14. George Emmanuel Iatridis, 2012. "Voluntary IFRS disclosures: evidence from the transition from UK GAAP to IFRSs," Managerial Auditing Journal, Emerald Group Publishing, vol. 27(6), pages 573-597, June.
    15. Daniela PORDEA & Alin-Constantin DUMITRESCU, 2021. "Convergence to IFRS in Romania – Score per Minute," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 19(162), pages 373-373, May.
    16. Barbara Su, 2023. "Banking practices and borrowing firms’ financial reporting quality: evidence from bank cross-selling," Review of Accounting Studies, Springer, vol. 28(1), pages 201-236, March.
    17. Matthew Smith & Francisco Alvarez, 2022. "Predicting Firm-Level Bankruptcy in the Spanish Economy Using Extreme Gradient Boosting," Computational Economics, Springer;Society for Computational Economics, vol. 59(1), pages 263-295, January.
    18. Stephen Brown & William Goetzmann & Bing Liang & Christopher Schwarz, 2008. "Mandatory Disclosure and Operational Risk: Evidence from Hedge Fund Registration," Journal of Finance, American Finance Association, vol. 63(6), pages 2785-2815, December.
    19. Premachandra, I.M. & Bhabra, Gurmeet Singh & Sueyoshi, Toshiyuki, 2009. "DEA as a tool for bankruptcy assessment: A comparative study with logistic regression technique," European Journal of Operational Research, Elsevier, vol. 193(2), pages 412-424, March.
    20. José Carlos Trejo García & Humberto Ríos Bolívar & Francisco Almagro Vázquez, 2016. "Actualización del modelo de riesgo crediticio, una necesidad para la banca revolvente en México," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 8(1), pages 17-30, March.
    21. C, Loran & Eckbo, Espen & Lu, Ching-Chih, 2014. "Does Executive Compensation Reflect Default Risk?," UiS Working Papers in Economics and Finance 2014/11, University of Stavanger.

    More about this item

    Keywords

    Impact of IFRS; Gray index of comparability; Romanian listed companies; companies in financial distress;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aic:revebs:y:2015:j:15:istratec. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sireteanu Napoleon-Alexandru (email available below). General contact details of provider: https://edirc.repec.org/data/feaicro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.