The Impact of the Adoption of International Financial Accounting Standards (IFRS) on Consolidated Financial Statements of Italian Enterprises

Marchini, Pier Luigi; Andrei, Paolo; Tibiletti, Veronica

doi:10.2139/ssrn.1630460

Cited by 2 publications

(1 citation statement)

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“…Therefore, a number of studies focused on technical aspects related to the IFRS adoption (i.a., Andrei, Marchini, & Tibiletti, 2005;Corbella, Florio, Lionzo & Tessitore, 2007;Corbella & Florio, 2010), on the different informative content of financial statements (i.a., Paglietti, 2009;Capkun, Cavazan-Jeny, Jeanjean & Weiss, 2010;Mauro & Catuogno, 2010;Pieri, 2010;Veneziani, Carini, Bendotti & Teodori, 2010) and on the competing issues mentioned above (i.a., Mattei, 2006;Quagli, Avallone & Ramassa, 2007;Aussenegg, Inwink & Schneider, 2008;Cai, Rahman, & Courtenay, 2008;Capkun et al, 2008;Paglietti, 2009;Callao & Jarne, 2010). Our study aims at contributing to the literature on IFRS adoption in Italy shedding light on the actual impacts of the transition to IFRS on financial statements, on the relevance of such impacts on main accounting figures, and on the different degree of subjectivity arising from the adoption of those evaluation criteria which had great impacts on the financial statements presented by Italian companies.…”

Section: Ifrs Adoption In Italymentioning

confidence: 99%

IFRS Adoption in Italy: Which Effects on Accounting Figures and Subjectivity?

Corbella

Florio

Rossignoli

2013

AFR

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The issue about the degree of subjectivity incidental to financial statements is topical, although it has long been studied and debated. Indeed, such issue recurs any time new accounting rules or standards are issued. And, of course, it recurs in case of a complete renovation of the accounting system of reference, such as the one that took place in Europe in 2005, when all listed companies were required to repeal their national accounting rules and GAAP, and to adopt IFRS for the preparation of their consolidated financial statements.This study focuses on such transition with specific reference to the Italian context and explores three interconnected issues: a) identification of the changes in the evaluation criteria -from the Italian regulations and GAAP to IFRSwhich actually impact on the financial statements presented by Italian companies in the year of transition; b) appreciation of the importance of such impacts, based on (1) how often each adjustment recurs; (2) whether they determine an increase or decrease in accounting figures and (3) how relevant their effects are on the main accounting figures, namely net earnings and net capital; c) discussion about the managerial discretion introduced by the most impacting evaluation criteria identified, in comparison with the Italian provisions and GAAP previously applied.The overall analysis demonstrates that IFRS introduction determined wide impacts on financial statements, affecting most assets and liabilities, but its impacts on accounting figures were less significant than could be expected. In terms of subjectivity, however, differences are very significant.

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