Title: An empirical examination of IFRS impact for European and non-European countries

Authors: George Emmanuel Iatridis; Eirini Alexiou

Addresses: Department of Economics, University of Thessaly, Volos 38 333, Greece ' 18 ?rahthou Street, Trikala 42100, Greece

Abstract: This study has used Gray's comparability index to investigate the impact of IFRS adoption on company financial position and performance for Germany, France, South Africa and Israel. It assessed how IFRS-based financial numbers change in comparison with local GAAP for European and non-European countries. The study also focused on how IFRS implementation affects market value and book value relevance. The examination of the comparability indices has shown that, unlike Israel, European and South African companies experienced a positive change in equity and earnings. Israeli companies displayed a positive change in leverage. European and Israeli companies displayed a negative change in liquidity. The regression analysis has found that European companies displayed higher leverage and earnings. Non-European companies exhibited higher equity and liquidity. The findings of this study confirm that the value relevance of reported financial information is likely to be significantly different between local GAAP and IFRSs. For both European and non-European companies, the impact of IFRSs on value relevance is significantly higher as opposed to local GAAP.

Keywords: International Financial Reporting Standards; IFRS impact; IFRS transition; comparability index; value relevance; accounting standards; financial position; firm performance; Germany; France; South Africa; Israel; market value; book value; local GAAP; equity; earnings; leverage; liquidity.

DOI: 10.1504/IJEA.2014.067425

International Journal of Economics and Accounting, 2014 Vol.5 No.4, pp.336 - 356

Published online: 14 Feb 2015 *

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