The transition to IFRS: disclosures by Portuguese listed companies
In the context of the CESR and of the Portuguese market regulator recommendations regarding the disclosure of the impacts of the transition to IFRS, this paper analyses the content of those disclosures by Portuguese listed companies. We found a high degree of variability among the disclosure either regarding the qualitative (narrative explanations of transition) or quantitative (reconciliations) disclosures. The results show that the objective of comparability, relevance and understandability stated in CESR’s recommendation were not achieved. Regarding accounting changes, the analysis shows that the reported impacts by companies confirmed expectations based on prior de jure studies on major impacts of changing from Portuguese GAAP to IFRS; these major impacts regard the recognition of intangibles, the accounting treatment of goodwill and financial instruments. Finally, Gray’s (1980) “conservatism” index was computed using the reconciliated profits to IFRS reported by companies. This analysis shows that Portuguese standards are more conservative than IFRS. This study is relevant to several parties: to the market regulators and policy makers in predicting the level of compliance with IFRS and calling attention for the importance of enforcement mechanisms; to the preparers, auditors and users in identifying the most problematic areas of implementation of IFRS.
|Date of creation:||Aug 2008|
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- Jordi Perramon & Oriol Amat, 2006. "IFRS introduction and its effect on listed companies in Spain," Economics Working Papers 975, Department of Economics and Business, Universitat Pompeu Fabra.
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- T. Colwyn Jones & Robert Luther, 2005. "Anticipating the Impact of IFRS on the Management of German Manufacturing Companies: Some Observations from a British Perspective," Accounting in Europe, Taylor & Francis Journals, vol. 2(1), pages 165-193, January.
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