Title: An analysis of profit and loss in Brazil before and after the full adoption of the International Financial Reporting Standards

Authors: Isabel Gallego-Álvarez; Marta Cristina Pelucio-Grecco; Henrique Formigoni; Cecília Moraes Santostaso Geron

Addresses: Department of Business Administration, University of Salamanca, Campus Miguel de Unamuno, Edificio FES, 37007, Salamanca, Spain ' Mackenzie Presbyterian University, Applied Social Sciences Center, Rua da Consolaçao, 930, Prédio 45, São Paulo, 01302-907, Brazil ' Mackenzie Presbyterian University, Applied Social Sciences Center, Rua da Consolaçao, 930, Prédio 45, São Paulo, 01302-907, Brazil ' Mackenzie Presbyterian University, Applied Social Sciences Center, Rua da Consolaçao, 930, Prédio 45, São Paulo, 01302-907, Brazil

Abstract: This study aims to determine whether the main items of the profit and loss (P&L) accounts of listed Brazilian companies have been modified, according to sector, after Brazil's adoption of the International Financial Reporting Standards (IFRS). The sample is composed of 118 companies classified by the Securities and Exchange Commission of Brazil (SECB) as corporate governance for the year before (2007) and the year after (2010) the implementation of IFRS. The analysis is based on the interpretation of biplots developed by Gower and Hand. The study concludes that a change did occur in the P&L accounts in the periods studied, which is substantiated by an analysis of the evolution of the national added value and explained by the application of new IFRS. This suggests that, unless there has been a significant alteration of performance in all sectors of the economy, the confrontation between P&L in Brazil has undergone significant changes in the different sectors of the economy after the full adoption of IFRS.

Keywords: International Financial Reporting Standards; IFRS adoption; profit and loss accounts; Brazil; listed companies; biplots; corporate governance; activity sectors.

DOI: 10.1504/IJAAPE.2014.064234

International Journal of Accounting, Auditing and Performance Evaluation, 2014 Vol.10 No.3, pp.255 - 278

Received: 23 Nov 2012
Accepted: 15 Dec 2013
Published online: 28 Aug 2014 *

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