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Implementation costs of IFRS 9 for non‐financial firms: evidence from China

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  • Xingtong Fang
  • Yuanyuan Guo
  • Beilei Mei
  • Jianfang Ye

Abstract

Examining Chinese non‐financial firms between 2016 and 2019, this study documents that the new accounting standard for financial instruments imposes severe implementation costs on affected firms, as evidenced by a significant rise in the selling of available‐for‐sale (AFS) equity investments and increased audit fee premiums. We also find that the disposal of AFS is more prominent in state‐owned enterprises (SOE) and firms issuing corporate bonds. The increase in audit fees is more severe for non‐SOEs, bigger audit firms and firms with a higher total account balance affected by the new standard.

Suggested Citation

  • Xingtong Fang & Yuanyuan Guo & Beilei Mei & Jianfang Ye, 2022. "Implementation costs of IFRS 9 for non‐financial firms: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2781-2805, June.
    • Handle: RePEc:bla:acctfi:v:62:y:2022:i:2:p:2781-2805
    DOI: 10.1111/acfi.12889
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    References listed on IDEAS

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