International Financial Reporting Standards Research Articles

INTERNATIONAL FINANCIAL REPOTING STANDARDS & IT’S CONVERGENCE IN INDIA 1.

In order to improve financial statemet comparability, accountability, and transparency, the adoption and convergence of International Financial Reporting Standards (IFRS) have become essential components of financial reporting on a global scale. This study examines the development and effects of IFRS convergence in India, focusing on the corporate, regulatory, and financial ecosystem consequences. Financial reporting procedures have undergone major changes as a result of the gradual implementation of the Indian Accounting Standards (Ind AS), which are convergent with IFRS, across a number of sectors. The present study scrutinizes the advantages of implementing IFRS, such as enhanced investor trust and global comparability, in conjunction with the obstacles encountered by Indian enterprises, such as escalated compliance expenses and the intricacy of novel standards. The study also explores the role regulatory organizations play in promoting the convergence process, including the Securities and Exchange Board of India (SEBI) and the Institute of Chartered Accountants of India (ICAI). This study offers insights into the efficacy of IFRS convergence in India by a thorough analysis of the body of research, case studies, and empirical data. It highlights significant areas of success as well as persistent challenges. The results indicate that although convergence has helped India's standing in the international financial sphere, ongoing work is still needed to resolve implementation problems and guarantee the smooth adoption of IFRS in the Indian setting. Keywords: Finance, Financial Report, IFRS.

The Impact of International Financial Reporting Standards on Global Accounting Practices

Purpose: This study examines the impact of International Financial Reporting Standards (IFRS) on global accounting practices, focusing on financial reporting quality, economic outcomes, and the influence of regulatory and cultural contexts. Research Design and Methodology: A mixed-methods approach was employed, combining qualitative interviews with accounting professionals and quantitative analysis of financial statements from various countries. The study investigates the benefits and challenges of IFRS adoption, considering factors such as regulatory environments, cultural differences, and economic development levels. Findings and Discussion: The findings reveal that IFRS adoption enhances financial reporting quality by increasing transparency, reducing earnings management, and improving comparability of financial statements. These benefits are most pronounced in countries with strong regulatory frameworks. However, challenges include high costs and complexities of the transition process, especially for smaller firms and developing countries. Cultural and institutional factors significantly influence the effectiveness of IFRS adoption, with varying impacts across different economic contexts. Implications: The study's results underscore the need for supportive regulatory environments and adequate training for accounting professionals to facilitate effective IFRS adoption. Policymakers and regulators should consider tailored approaches to address specific challenges faced by different countries. Companies, particularly in developing regions, must plan and allocate resources carefully to manage the transition to IFRS. These insights offer practical guidance for enhancing the effectiveness of IFRS implementation worldwide

Impact of Indian Accounting Standards (IND AS) on Financial Statements

The adoption and implementation of accounting standards play a pivotal role in shaping the financial reporting landscape of a country, influencing how businesses communicate their financial performance and position to stakeholders. In the case of India, the transition from Generally Accepted Accounting Principles (GAAP) to Indian Accounting Standards (Ind-AS) marked a significant paradigm shift in the accounting framework. The move was aimed at aligning Indian accounting practices with global standards, fostering transparency, comparability, and international investment. Historically, India had been following its own set of accounting standards, which sometimes diverged from international norms, leading to challenges in cross-border financial analysis and investment decisions. Recognizing the need for convergence with International Financial Reporting Standards (IFRS), the Ministry of Corporate Affairs (MCA) in India mandated the adoption of Ind-AS for certain classes of companies, primarily listed entities and large unlisted companies. The adoption of Ind-AS was a phased process, with the first set of companies transitioning in the financial year 2016-17. The primary objective was to enhance the quality and reliability of financial reporting, making it more comparable and relevant on a global scale. Ind-AS aimed to bring about consistency in accounting treatments, disclosures, and presentation of financial statements, fostering a more transparent and investor-friendly environment. One of the key motivations behind the shift to Ind-AS was to facilitate easier access to global capital markets for Indian companies. By adhering to internationally recognized accounting standards, Indian businesses sought to attract foreign investment and broaden their investor base. This move was particularly crucial as India aimed to position itself as a global economic player, attracting multinational corporations and fostering cross-border investments. The implementation of Ind-AS introduced changes in various aspects of financial reporting, affecting balance sheets, income statements, and disclosure practices. Companies faced the challenge of adapting to new measurement criteria, recognition principles, and disclosure requirements. The impact of these changes extended beyond mere compliance; it influenced how companies assessed their assets, liabilities, and overall financial performance. Additionally, the adoption of Ind-AS prompted companies to reevaluate their internal control mechanisms, financial policies, and governance structures. The transition required a robust framework for training and educating financial professionals, auditors, and other stakeholders to ensure a smooth and accurate implementation of the new standards.

Earnings quality of multinational corporations: Evidence from Latin America before and after IFRS implementation

AbstractThis study evaluates whether Latin American multinational corporations (MNCs) report higher quality of accounting reports than companies with only operations in their home countries. In addition, it explores whether the impact of internationalization on the quality of accounting information has changed since the implementation of the International Financial Reporting Standards (IFRS) in the region. An emerging area of research studies the effect of firms’ internationalization on accounting and finance. Nevertheless, evidence of the impact of internationalization on the quality of earnings quality is scarce. Based on a sample of public organizations listed on the main stock exchanges of Brazil, Mexico, Peru, and Chile from 2000 to 2020, this study finds that companies with international operations present higher‐quality accounting reports than firms with only local operations. The impact of IFRS implementation on the quality of financial reports is significant only for companies with operations in their home countries. Latin American MNCs show a decline in the quality of accounting reports after adopting IFRS.

ВІДМІННІСТЬ ВІДОБРАЖЕННЯ НЕМАТЕРІАЛЬНИХ АКТИВІВ У ФІНАНСОВІЙ ЗВІТНОСТІ ЗА ФОРМАМИ МСФЗ ТА НП(С)БО НА ПРИКЛАДІ АГРАРНИХ ФОРМУВАНЬ

Introduction. Over the past ten years, significant changes and improvements have taken place in accounting and auditing, both in legislation and requirements for accounting and auditing. In particular, large enterprises should keep records under International Financial Reporting Standards (IFRS) and ideally reflect their performance in financial statements under IFRS forms. On the Balance Sheet of agricultural formations, one of the main assets is land, but since most enterprises rent it, there is a right to use land plots, which is an intangible asset. It is important for users of financial statements, who are interested in information in the field of land relations, to correctly understand the reflected names of articles and financial indicators in reporting. Problem Statement. Intangible assets are divided into different types and groups, but in the financial statements according to NAS for them there is only one article with the general title “Intangible assets.” In accordance with the requirements of IFRS, an entity has the possibility to divide types or groups of intangible assets into separate items. However, in Ukraine there is a problem of imperfection of financial reporting forms under IFRS, which requires in-depth study and wider disclosure of financial reporting items, including intangible assets. The purpose of the article is to distinguish differences between the reflection of financial indicators on intangible assets in the reporting forms under NAS and IFRS in agricultural formations and outline for users of financial statements advantages and disadvantages. Methods. General scientific methods of cognition and the study of phenomena and processes were used; statistical and economic methods of analysis - when summarizing and presenting information on financial indicators of intangible assets in reporting; comparison - when intangible assets are reflected in the financial statements under NAS and IFRS. Results. The article reflects the stages of formation of IFRS in Ukraine, focuses on the reflection of financial indicators in the NAS and IFRS reporting forms on the example of agricultural formations, their advantages and disadvantages, and characterizes the types of intangible assets. Conclusions. In the process of the research , the opinion was formed that the reflection of intangible assets under IFRS reporting is more detailed and informative than under NAS reporting.

Adaptation of the Russian accounting system for non-financial assets in accordance with the International Public Sector Accounting Standards: A problem analysis. Part 2

Subject. This article analyzes the areas of concern of accounting for non-financial assets in State-funded (municipal) and autonomous institutions in accordance with the International Public Sector Accounting Standards. Objectives. The article aims to identify and analyze the areas of concern associated with the adaptation of the Russian system of accounting for non-financial assets in accordance with the International Public Sector Accounting Standards based on a comparison of the main provisions of the International Financial Reporting Standards and the Russian Federal Accounting Standards for the public sector. Methods. For the study, I used the methods of comparison, systematization, and data generalization. Results. The article systematizes the main theoretical approaches to the study of issues in the field of adaptation of the Russian system of accounting for non-financial assets in accordance with the International Public Sector Accounting Standards. Relevance. The results of the study and the theories of adaptation of the Russian system of accounting for non-financial assets in accordance with the International Public Sector Accounting Standards can be used for the theoretical study of this issue, as well as in practical activities in State-owned (municipal) publicly-funded and autonomous institutions.

THE IMPACT OF APPLYING INTERNATIONAL STANDARD NINE ON THE QUALITY OF ACCOUNTING INFORMATION

There is an increasing need to find professional institutions that sponsor the work of companies in the financial and accounting fields due to the changes and developments taking place in the economic environments. Hence, the International Accounting Standards Board - IASB, which includes many other sub-boards like the Financial Accounting Standards Board - FASB, has issued many scientific publications in financial and accounting fields. Furthermore, the International Accounting Standards Board, through its sub-boards, including the Financial Accounting Standards Board, has formulated several International Financial Reporting Standards ( IFRS ) to improve the quality of financial reporting and the transparency of the information it contains in a globally applicable and accepted manner. This information would reflect the current situation of economic institutions in terms of performance and financial position in response to changes in economic environments, and to meet the needs of This framework will be applied consistently across transactions, industries, and capital markets to improve the comparability of financial data between economic institutions operating in the same sector globally and within a comprehensive, unified, and stable framework.

Determinants of Investment Property Choice: an Empirical Analysis of Nigeria Listed Firms

In order to investigate the factors influencing the choices of investment properties of the firms listed on Nigeria Exchange Group (NGX), this study carried out an empirical investigation. 155 businesses that were listed on the Nigerian Exchange Group (NGX) as of December 31, 2022, made up the study's population. A purposive sampling strategy was used to select a sample size of fifty-five firms. Data were obtained from the companies' audited annual financial reports for the years 2012-2022. Panel data regression (PDR) was utilized for the analysis of data. The findings showed that the accounting choices made by businesses regarding the management of investment property are significantly influenced by both debt and business size. Furthermore, the choice of how to treat investment property in accounting is not much influenced by the degree of board independence. Moreover, non-financial firms listed on the stock exchange choose different accounting methods for their investment assets due to the negative and significant effects of ownership concentration. This is due to the fact that a company that has a high ownership concentration is less likely to base its accounting choices on the International Financial Reporting Standards (IFRS). This implies that businesses are less likely to adhere to the fair value technique for valuing investment property if their ownership is more concentrated. The study discovered that a firm's accounting decision on the handling of investment property is significantly influenced by the drivers of investment property choosing. It is, thus, recommended the need for firms to set up a system that would track and assess investment property choices on an ongoing basis. This is expected to develop robust, and proactive plans that consider both short-term financial gain and long-term viability.

THE CHALLENGES OF IMPLEMENTING ACCOUNTING INFORMATION SYSTEMS IN IFRS AND GAAP : GLOBAL STUDY

This paper provides a thorough analysis of the difficulties that arise when putting accounting information systems (AIS) into practice under the auspices of generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS). The research delves into the worldwide terrain, covering a range of commercial settings and legal structures. Using both qualitative and quantitative research methods, the study looks into important variables that affect how well AIS is adopted and integrated in accordance with GAAP and IFRS requirements. KEYWORDS: Accounting Information Systems (AIS), International Financial Reporting Standards (IFRS), Generally Accepted Accounting Principles (GAAP), Global Study

Testing the impact of environmental taxation and IFRS adoption on consumption-based carbon in European countries.

Several governance regulations have been adopted in European countries to promote environmental sustainability, such as environmental taxation and environmental disclosures in financial reports. In this context, this paper examines the linkage between environmental taxation, International Financial Reporting Standards (IFRS), and environmental sustainability in European countries from 1994 to 2018. Unlike earlier empirical studies, the present work is the first to assess the impact of environmental taxation and IFRS adoption on consumption-based carbon emissions. In order to yield valid and reliable outcomes, the modern econometric method that is vigorous to cross-sectional dependence and slope heterogeneity was employed. Likewise, the study uses the novel method of moment quantile regressions (MMQR). The MMQR outcomes illustrated that environmental taxation significantly negatively affects consumption-based emissions in European countries, indicating that environmental taxation has a positive effect on the ecological sustainability. Besides, the findings show that IFRS negatively affects consumption-based emissions, while economic growth positively affects the level of consumption-based emissions. Therefore, European governments must use fiscal and financial policies to mitigate ecological pollution. Moreover, more environmental, social, and governance (ESG) disclosure in European industries could also help promote environmental sustainability in European countries.

A COMPARATIVE STUDY ON FINANCIAL REPORTING OF SELECT NIFTY FIFTY COMPANIES USING GRAY’S COMPARABILITY INDEX

The Institute of Chartered Accountants of India (ICAI) plays a crucial role in promoting globally recognized accounting standards in the Indian context. In this endeavor, ICAI has introduced the Indian Accounting Standards (Ind AS) to align with the International Financial Reporting Standards (IFRS). We aim to assess the impact of implementing the new accounting standards compared to the pre-existing standards. To achieve this, we employed Grays comparability index model on the key items of the consolidated financial statements of selected NIFTY FIFTY companies and examined the outcomes. The analysis reveals significant alterations in the figures of current and non-current liabilities, as well as total income and total expenses. These changes are attributed to various recognition and disclosure criteria introduced by the new accounting standard. KEY WORDS: Ind AS, IGAAP, NIFTY FIFTY, Grays Comparability Index

Hedge accounting, IFRS 9, and audit fees: Evidence from China

AbstractUsing data for 2016–2021 on a sample of Chinese non‐financial firms, this study documents a positive association between the use of hedge accounting and audit fees and finds that the new requirements under International Financial Reporting Standards 9 (IFRS 9) help mitigate this positive relationship. Channel analyses show that the new hedge accounting requirements mitigate earnings volatility and accruals management, which results in audit fee reductions. Further, the post‐IFRS 9 audit fee decrease is greater among large audit firms, firms in regions with higher marketisation levels and firms with better corporate governance.

FINANCIAL REPORTING EVOLUTION: A CASE STUDY OF IND AS IMPLEMENTATION OF INDIAN STEEL COMPANIES

This article investigates the ramifications of the transition from Indian Generally Accepted Accounting Principles (IGAAP) to Indian Accounting Standards (Ind AS) on financial reporting within the Indian steel industry. In an era of global economic interconnectivity, the move towards aligning with international standards, notably International Financial Reporting Standards (IFRS), holds profound implications. The study underscores the paramount importance of transparency and comparability in financial reporting. The study employs the Grays Comparability Index (GCI) to quantitatively assess the conservatism levels in reporting various financial statement items. The findings reveal that while assets, liabilities, and equity exhibit relatively consistent reporting under both standards, Ind AS demonstrates a propensity for greater optimism in the reporting of income, expenses, and financial activities.

IMPACT OF IMPLEMENTING INTERNATIONAL FINANCIAL REPORTING STANDARDS IN JOINT STOCK COMPANIES ON THE NATIONAL ECONOMY

Today, two benchmarks - International Financial Reporting Standards - IFRS (International Financial Reporting Standards - IFRS) and the generally accepted accounting rules of the USA - BHUQ (Generally Accepted Accounting Principles - GAAP) are recognized as the standard of accounting. According to the analysis, there is almost no accountant in the world who is not aware of MHXS. Also, the number of countries that recognize international standards is increasing day by day. Also, the number of countries that recognize international standards is increasing day by day. It serves as an important tool in mutual cooperation between the countries of the world, including in the development of economic relations, especially in improving the investment environment. This article covers a number of aspects such as MHSS, international experience, and its use in the countries of the world.

Does culture still matter post-IFRS?

Purpose This study aims to examine the impact of culture on earnings management after changing to International Financial Reporting Standards (IFRS). Design/methodology/approach The study’s sample selection comprises all publicly listed firms in 25 countries between 2000 and 2017 from DataStream database with cultural dimensions ratings from Hofstede et al. (2010). The initial sample contained 2,451 firms. Findings This study provides evidence that the interaction between national culture and IFRS adoption remains influential in explaining differences in the magnitude of earnings management behavior across countries. Originality/value This study higlights how IFRS and the cultural values interact with each other and affect earnings quality. In particular, the authors provide evidence on the relationship between individualism, uncertainty avoidance, power distance and masculinity of national culture and earnings management and, primarily, find that national culture significantly influences the decisions of managers after adopting IFRS.

Losing altitude: The impact of new leasing standards on the liquidity, leverage, profitability and valuation of U.S. and European airlines

The global airline industry represents fertile ground for research due to its susceptibility to extraneous demand shocks such as fuel price hikes, terrorist attacks, and global pandemics coupled with high leverage and high reliance on leasing. Accounting Standards Codification (ASC) 842 Leases and International Financial Reporting Standard (IFRS) 16 Leases became effective January 1st, 2019 for publicly-traded firms in the U.S. and overseas, requiring capitalization of the majority of leased assets. This study was motivated by how the acts may have affected reported airline liquidity, leverage, profitability and stock price, and if any evidence existed of lease restructure attempts in order to avoid capitalization; which may provide initial impacts. Using a sample of publicly-traded airlines incorporated in the U.S. and Europe, the current study used firm year-level filings from 2017 to 2019 to determine if passage of the acts were associated with changes in liquidity, leverage, profitability and stock price. One-way analysis of variance (ANOVA) and independent samples t-test parametric statistical testing was employed to determine any statistically significant change in the means of selected ratios operationalizing liquidity, leverage, profitability and firm valuation. The results indicated no significance for any of the variables operationalizing the latent constructs providing evidence contrary to previous predictions, and a significant difference between the two regions, worthy of further study. These findings are significant due to the vast financial reporting implications associated with these acts and their potential to skew financial ratios, juxtaposed against the ever-present threat of extraneous demand shocks which permeate this industry. The research also suggests management may have attempted lease restructures to circumvent the capitalization requirements of the act and warrants further research to investigate the generalizability of these findings to other industries.

Geopolitical Dynamics and the Adoption of International Financial Reporting Standards: Implications from the Conflict between Ukraine and Russia

This study explores the potential implications of geopolitical dynamics surrounding the conflict between Ukraine and Russia on the adoption and implementation of International Financial Reporting Standards (IFRS) in affected countries. Analyzing the interplay between political tensions, economic sanctions, and domestic instability, the research sheds light on the challenges and opportunities for regulatory harmonization and financial transparency in regions affected by geopolitical conflicts. Key findings highlight the impact of regulatory uncertainty, economic sanctions, and security concerns on businesses' compliance with IFRS, as well as the influence of policy shifts and government agendas on the trajectory of regulatory reforms. The study underscores the importance of adaptive regulatory strategies and international cooperation in promoting financial stability, transparency, and resilience amid geopolitical uncertainty and conflict. By addressing these challenges, stakeholders can navigate the complexities of geopolitical dynamics to advance the adoption and implementation of IFRS, fostering global financial standards and stability in the face of geopolitical challenges.

Ontology-Driven Architecture for Managing Environmental, Social, and Governance Metrics

The burgeoning significance of environmental, social, and governance (ESG) metrics in realms such as investment decision making, corporate reporting, and risk management underscores the imperative for a robust, comprehensive solution capable of effectively capturing, representing, and analysing the multifaceted and intricate ESG data landscape. Facing the challenge of aligning with diverse standards and utilising complex datasets, organisations require robust systems for the integration of ESG metrics with traditional financial reporting. Amidst this, the evolving regulatory landscape and the demand for transparency and stakeholder engagement present significant challenges, given the lack of standardized ESG metrics in certain areas. Recently, the use of ontology-driven architectures has gained attention for their ability to encapsulate domain knowledge and facilitate integration with decision-support systems. This paper proposes a knowledge graph in the ESG metric domain to assist corporations in cataloguing and navigating ESG reporting requirements, standards, and associated data. Employing a design science methodology, we developed an ontology that serves as both a conceptual foundation and a semantic layer, fostering the creation of an interoperable ESG Metrics Knowledge Graph (ESGMKG) and its integration within operational layers. This ontology-driven approach promises seamless integration with diverse ESG data sources and reporting frameworks, while addressing the critical challenges of metric selection, alignment, and data verification, supporting the dynamic nature of ESG metrics. The utility and effectiveness of the proposed ontology were demonstrated through a case study centred on the International Financial Reporting Standards (IFRS) framework that is widely used within the banking industry.

International trade, mandatory IFRS adoption and financial reporting quality

Purpose This study examines how bilateral international trade among mandatory International Financial Reporting Standards (IFRS) adopter countries moderates the relation between IFRS adoption and firms’ financial reporting quality. Design/methodology/approach The authors use data from 2007 to 2015 and focus on publicly listed firms from non-European Union countries that adopted IFRS on a mandatory basis. Findings The authors find that the interaction between mandatory IFRS adoption and a country’s bilateral trade with other countries using IFRS is negatively and significantly related to accruals-based earnings management, which is an inverse measure of financial reporting quality. This result is driven by firms in less developed countries. The improvement in accounting quality is for firms located in countries that both fully and partially adopt IFRS. The authors also find a significant and negative coefficient for the relation between real earnings management and the interaction between mandatory IFRS adoption and a country’s bilateral trade with other IFRS countries in the post-global financial crisis period. Originality/value Overall, the authors’ results are consistent with the notion that the mandatory adoption of IFRS creates a positive externality where firms improve their accounting quality because increased financial statement comparability means that foreign customers and suppliers can monitor the quality of earnings more easily.

THE MODERATING ROLE OF IFRS ADOPTION SPEED IN THE RELATIONSHIP BETWEEN CAPITAL INFLOWS AND INCLUSIVE GROWTH IN SUB-SAHARAN AFRICA

Purpose: This study investigates how the speed of International Financial Reporting Standards (IFRS) adoption condition the capital inflows and inclusive growth nexus in Sub-Saharan Africa. While existing literature primarily examined IFRS impacts at the firm level, this study filles a significant gap by focusing on the macroeconomic effects of IFRS adoption speed, particularly its role in enhancing the benefits of capital inflows such as Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), and Foreign Aid. Methods: This study employs a dynamic panel data analysis using the Generalized Method of Moments (GMM) to examine how the speed of IFRS adoption impacts capital inflows and fosters inclusive growth across Sub-Saharan African countries. The study leveraged a dataset spanning from 2005 to 2019, covering 48 countries in the region. By analysing the relationship between IFRS adoption speed, capital inflows, and inclusive growth, the study offers new insights into the macroeconomic benefits of adopting IFRS. Findings: Findings suggest that speedy IFRS adoption significantly enhances the positive impact of capital inflows on inclusive growth, underlining the importance of swift and effective implementation of IFRS for equitable economic development. Implications: This study contributes to the existing literature by providing a macroeconomic perspective on IFRS adoption and highlighting the importance of financial reporting standards in achieving inclusive growth in Sub-Saharan Africa. Originality: This study introduces a novel approach by examining how the speed of International Financial Reporting Standards (IFRS) adoption moderates the impact of capital inflows on inclusive growth in Sub-Saharan Africa. Bridging the gap in existing literature, it shifts the focus from firm-level effects of IFRS and direct impacts of capital inflows on economic growth to a nuanced exploration of how financial reporting standards' adoption speed can enhance a country's ability to utilize foreign investments for inclusive economic development. Unique in its regional focus, this research provides critical insights into the macroeconomic benefits of IFRS in Sub-Saharan Africa, offering valuable implications for policymakers and contributing significantly to the discourse on financial innovation, regulatory frameworks, and sustainable economic growth in emerging markets.