Impact of IFRS Adoption for Individual Reporting Purposes on the Profit of Hungarian listed Companies

Abstract

The pur­pose of this art­icle is to ana­lyze the ef­fects of the man­dat­ory trans­ition to IFRS (In­ter­na­tional Fin­an­cial Re­port­ing Stand­ards) in Hun­gary at the be­gin­ning of 2017 (Act CLXXVIII of 2015) on the profits and fin­an­cial per­form­ance of com­pan­ies lis­ted on the Bud­apest Stock Ex­change. The re­search as­sumes a change in ac­count­ing reg­u­la­tions that will af­fect the meas­ure­ment of res­ults and valu­ation pro­ced­ures that will have a sig­ni­fic­ant im­pact on the fin­an­cial con­di­tion of com­pan­ies. The method of the ana­lysis is the in­verse of the com­par­ab­il­ity index - ori­gin­ally de­veloped by Gray (1980), which al­lows the res­ults to be com­pared between dif­fer­ent ac­count­ing sys­tems. The cal­cu­la­tion of the in­dexes is based on fin­an­cial data pub­lished in the in­di­vidual an­nual re­ports of the vari­ous ac­count­ing sys­tems men­tioned above for lis­ted com­pan­ies trans­ition­ing to IFRS. The study uses math­em­at­ical-stat­ist­ical cal­cu­la­tions to com­pare the val­ues of the in­dexes. In con­nec­tion with the es­tab­lish­ment of the study, it was found that there is a sig­ni­fic­ant dif­fer­ence between the res­ults and in­dic­at­ors of the ex­amined com­pan­ies ac­cord­ing to the IFRS and the Hun­garian Ac­count­ing Stand­ards, of which higher av­er­age val­ues can be ob­served in the case of IFRS.