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A cross‐country analysis of IFRS reconciliation statements

Author

Listed:
  • Suzanne Fifield
  • Gary Finningham
  • Alison Fox
  • David Power
  • Monica Veneziani

Abstract

Purpose - One of the most fundamental changes to affect financial reporting in recent years has been the introduction of International Financial Reporting Standards (IFRS). This paper aims to examine the nature of the Income Statement and Net Equity IFRS adjustments for a sample of companies from the UK, Ireland and Italy following the introduction of IFRS. Design/methodology/approach - A sample of IFRS Reconciliation Statements are examined to identify the most significant IFRS adjustments. Using an index of conservatism, these amounts are further analysed to assess their impact on the accounting numbers reported under previous national GAAP. Findings - For all three countries, the IFRS profit was greater than that reported under previous national GAAP. IFRS also had a significant effect on net worth; while UK and Italian companies experienced an increase in equity upon the adoption of IFRS, the Irish firms in the sample recorded a decrease. The analysis also indicated that the impact of IFRS on profit and net worth was primarily attributable to a few core standards including IFRS 2, IFRS 3, IFRS 5, IAS 10, IAS 12, IAS 16, IAS 17, IAS 19, IAS 38 and IAS 39. Practical implications - A multi‐country perspective for future IFRS research is required as the impact of individual IFRS varies in importance from one country to another. Originality/value - By analysing the IFRS that have had a significant impact on accounting numbers prepared under previous national GAAP, opportunities for future research are identified.

Suggested Citation

  • Suzanne Fifield & Gary Finningham & Alison Fox & David Power & Monica Veneziani, 2011. "A cross‐country analysis of IFRS reconciliation statements," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 12(1), pages 26-42, May.
    • Handle: RePEc:eme:jaarpp:v:12:y:2011:i:1:p:26-42
    DOI: 10.1108/09675421111130595
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    Citations

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    Cited by:

    1. Jonas Oliveira & Graça Azevedo & Bertina Oliveira, 2018. "Impairment Losses: The Impact of First‐time Adoption of the Accounting Standardisation System in Portugal," Australian Accounting Review, CPA Australia, vol. 28(4), pages 556-576, December.
    2. da Silva, Ricardo Luiz Menezes & Nardi, Paula Carolina Ciampaglia, 2017. "Full adoption of IFRSs in Brazil: Earnings quality and the cost of equity capital," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1057-1073.
    3. 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.
    4. 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.
    5. Mohammad K. Shbeilat & Mohammad N. AL Harasees, 2018. "Do Listed Companies Need an IFRS Committee Beside Audit Committee?," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(2), pages 8-18, April.

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