Cost and benefits of international financial reporting standards (IFRSs) from the preparers' perspective: Evidence from Kosovo's implementation experience

Abstract

This research investigates the costs and benefits associated with the adoption of International Financial Reporting Standards (IFRS) in Kosovo. The study utilises a survey questionnaire methodology, collecting responses from 297 preparers’ of IFRS financial statements. The data was subsequently analyzed using Analysis of Variance (ANOVA) to evaluate the perceived benefits and costs of IFRS implementation. The findings indicate significant benefits from the adoption of IFRS; with increased comparability of financial statements ranking as the highest benefit (mean value 4.13); Greater confidence in financial information (mean value 4.07) and long-term net benefits for both the company (mean value 3.94) and Kosovo (mean value 3.95) followed closely. The most significant cost was identified as the harmonization of tax laws and others with IFRS (mean value 3.52), followed by additional work to ensure comparability and opening balances of the financial statements align with IFRS (mean value 3.05). On a weighted average, benefits outweighed costs at 3.72 versus 2.54, respectively; The research concludes that from a preparer's perspective, the benefits of adopting IFRS in Kosovo surpass the costs. However, the study acknowledges that perceptions may vary among different stakeholders and over time, and the long-term impacts of IFRS adoption are yet to be fully explored.