Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.14/98542
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- Title
- The Impact of mandatory conversion to IFRS on the net income of FTSEurofirst 80 firms
- Related
- Journal of applied research in accounting and finance, Vol. 3, No. 2 (2008), p.17-23
- Related
- http://www.mgsm.edu.au/wps/wcm/connect/Internet/Root/research/publications/journals/jaraf/2008dec/
- Publisher
- Macquarie Graduate School of Management
- Date
- 2008
- Author/Creator
- O'Connell, Vincent
- Author/Creator
- Sullivan, Katie
- Description
- Since the start of 2005 all European Union (EU) firms trading in a regulated market are required to adopt International Financial Reporting Standards (IFRS) for their consolidated financial accounts. Many more countries will - soon or later - follow suit and adopt IFRS for all listed firms. Nonetheless, the process of conversion from domestic standards to IFRS can often cause confusion for both preparers and user groups. This study investigates the impact of the mandatory conversion to IFRS on the Net Income of some of the largest firms in the EU - specifically, the constituents of the FTSEurofirst 80 index. The sample for the present work comprises those 37 constituents of the FTSEurofirst 80 index which: (i) are first time adopters of IFRS and (ii) had, at the sample selection date, voluntarily revealed their 2004 annual Net Income figures under both national standards and IFRS. Our results show that the conversion to IFRS leads to a statistically significant increase in 2004 Net Income and for nearly 75% of sample firms we find that the increase is material at the 5% level. Additional analysis reveals that IFRS 3 (Business Combinations) dwarfs all other international standards in terms of driving the observed differences between reported Net Income under domestic GAAP and IFRS for our sample firms.
- Description
- 7 page(s)
- Resource Type
- Journal Of Applied Research In Accounting And Finance Collection
- Resource Type
- journal article
- Organisation
- Macquarie University. Macquarie Graduate School of Management
- Identifier
- http://hdl.handle.net/1959.14/98542
- Identifier
- ISSN:1834-2590
- Identifier
- mq-20101028-162828
- Language
- eng
- Rights
- Publisher version archived with the permission of the publisher Macquarie Graduate School of Management, Macquarie University, NSW, Australia. This archived copy is available for individual, non-commercial use. Permission to use this version for other uses must be obtained from the publisher.
- Full Text
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