A review of the IFRS adoption literature

George, Emmanuel T. De; Li, Xi; Shivakumar, Lakshmanan

doi:10.1007/s11142-016-9363-1

Cited by 399 publications

(260 citation statements)

References 203 publications

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“…There is a vast literature covering the pros and cons of mandatory IFRS adoption (De George et al, 2016;Ball, 2006;Mohammadrezaei et al, 2015;Epstein, 2009). Ball (2006) and Epstein (2009) explain that the main argument supporting IFRS adoption is the resulting standardization of reporting across countries.…”

Section: Literature Review/backgroundmentioning

confidence: 99%

IFRS Adoption in Developing Countries: What Is the Impact?

Gingrich¹,

Kratz²,

Faraci³

2018

ijafr

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This study explores the impact of mandatory adoption of the International Financial Reporting Standards (IFRS) in developing countries on business leaders’ perceptions of the overall accounting and financial environment. The study employs survey data from the World Economic Forum’s Global Competitiveness Report to gauge business leaders’ perceptions of the accounting and financial environment. Eight countries across Latin America, Africa, and Asia comprise case studies, all of whom recently adopted mandatory IFRS use for publicly listed companies. Each survey variable is tracked over time, comparing pre and post IFRS adoption, vis-à-vis the same variable in a control country that did not adopt IFRS. IFRS adoption shows mostly positive impacts on the accounting environment in four cases. The impact of adoption in the other three countries is mostly insignificant. These results should encourage policymakers in developing countries to improve auditing and enforcement practices to increase the likelihood of positive results from IFRS adoption.

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Section: Literature Review/backgroundmentioning

confidence: 99%

IFRS Adoption in Developing Countries: What Is the Impact?

Gingrich¹,

Kratz²,

Faraci³

2018

ijafr

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“…With an increasing number of countries permitting or requiring IFRS (De George et al 2016), our findings should inform regulators, including the U.S. SEC, which has considered potential adoption of IFRS (SEC 2011). As IFRS allows more flexibility than U.S. GAAP, U.S. regulators should note the variation in firms' classification choices and the factors associated with those choices.…”

mentioning

confidence: 93%

Flexibility in cash-flow classification under IFRS: determinants and consequences

et al. 2017

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International Financial Reporting Standards (IFRS) allow managers flexibility in classifying interest paid, interest received, and dividends received within operating, investing, or financing activities within the statement of cash flows. In contrast, U.S. Generally Accepted Accounting Principles (GAAP) requires these items to be classified as operating cash flows (OCF). Studying IFRS-reporting firms in 13 European countries, we document firms' cash-flow classification choices vary, with about 76, 60, and 57% of our sample classifying interest paid, interest received, and dividends received, respectively, in OCF. Reported OCF under IFRS tends to exceed what would be reported under U.S. GAAP. We find the main determinants of OCF-enhancing classification choices are capital market incentives and other firm characteristics, including greater likelihood of financial distress, higher leverage, and accessing equity markets more frequently. In analyzing the consequences of reporting flexibility, we find some evidence that the market's assessment of the persistence of Rev Account Stud (2017)

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“…While the essay makes several observations on what can (and, perhaps more importantly, cannot) be learned from the research evidence, it is not a literature survey, of which there have been several already (e.g. Negash 2009, Mohammadrezaei et al 2013, European Commission 2014, ICAEW 2014, De George et al 2015, Kaaya 2015. Instead, the essay attempts to provide a perspective for assessing the outcomes from IFRS adoption, both present and future.…”

Section: Introductionmentioning

confidence: 99%

IFRS – 10 years later

Ball

2016

Accounting and Business Research

145

119

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A decade ago, the near-simultaneous adoption of International Financial Reporting Standards (IFRS) in over 100 countries could fairly have been described as a brave new world in financial reporting. Any systems innovation, and especially an innovation of such importance and magnitude, thrusts those involved (companies, users, and accountants) into the unknown. There was good reason to expect success, based largely on widespread enthusiasm for international standards and, behind that, recognition of the strong forces of globalization. Nevertheless, there were risks involved and there was limited a priori evidence to guide the decision-makers. A decade later, this is still the case. Globalization remains a potent economic and political force, and drives the demand for globalization in accounting. Nevertheless, most political and commercial activity remains local, so adoption of uniform rules does not by itself lead to uniform reporting behavior around the world. For many of the claimed benefits of IFRS adoption to be realized, uniform implementation would have to occur in a wide range of countries, which seems unlikely and requires more than simply creating regulatory enforcement mechanisms. Some evidence of actual outcomes from IFRS adoption has come to light, but, as will be argued below, by and large the evidence to date is not very useful. The IASB's (International Accounting Standards Board) valuation-centric Conceptual Framework leads it to pay little or no heed to the use of accounting information in contracting, despite the lip service recent amendments pay to even the narrower notion of stewardship. So IFRS adoption is an innovation of historical proportions whose worldwide effects remain somewhat uncertain. The essay concludes with comments on the status of China and the US.

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A review of the IFRS adoption literature

Cited by 399 publications

References 203 publications

IFRS Adoption in Developing Countries: What Is the Impact?

IFRS Adoption in Developing Countries: What Is the Impact?

Flexibility in cash-flow classification under IFRS: determinants and consequences

IFRS – 10 years later

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