Download or read book IFRS Adoption and Its Impact on Indian Stocks written by Ruzbeh Bodhanwala and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: International Financial Reporting Standards (IFRS) or converged Indian Accounting Standards (Ind AS) and its implications are imperative for Indian companies. India has decided to converge with IFRS, which means that India will have its own converged standards in line with the IFRS. On January 2, 2015, the Ministry of Corporate Affairs notified (PIB, 2015) that Ind AS would be mandatorily applicable for accounting period ending March 31, 2016 for companies falling under certain classifications. It is expected that once these are implemented, it will have a significant impact on financial statements. The convergence of IFRS will benefit Indian companies as they would be comparable to the peers internationally, which in turn would lead to a greater equity and debt participation by international players, thus making funding easier and cheaper. This paper focuses on two key issues: Are financial statements prepared using the two different standards significantly different? And, is there an increase in equity participation of foreign investors in Indian companies which have adopted IFRS? Companies covered in the study report financial statements as per two accounting standards because they are listed on Indian stock exchange and NASDAQ. Since these Indian companies have dual listing (India and international), on Bombay Stock Exchange (BSE), they report as per Indian GAAP, and as these companies are listed on NASDAQ, they need to prepare financial statement using IFRS.

Download or read book The Impact of Adoption of IFRS on Shareholders Wealth written by Samta Ordia and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: International Financial Reporting Standards (IFRS) are designed as a common set of language for business affairs so that company accounts could be understandable and comparable across international boundaries. IFRS leads to changes in the financial statement of the company. In order to check whether shareholders' wealth is affected or not by adoption of IFRS, the present research has been carried out. The objectives of the present paper are to determine the shareholders' wealth in terms of EVA (absolute and relative) before and after adoption of IFRS for Indian companies and to examine the different components of EVA before and after adoption of IFRS in India. To check the impact, paired data t-test has been administered for testing significance. The results of the study reveal that there is no improvement in EVA and EVA-related financial parameters due to IFRS adoption. For consistency concern, coefficient of variation has also been calculated. The results indicate that consistency in EVA and EVA-related financial parameters is observed after adoption of IFRS. It may also be concluded that the fundamental principle of accounting, i.e., consistency, is supported to a large extent by IFRS adoption.

Download or read book The Impact of IFRS Adoption on Stock Market Volatility written by Pushpa Negi and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: From 2005 onwards, consolidated financial statements of listed European companies of around 7,000 had to comply with IFRS (IAS). This study examines the impact of IFRS adoption on the stock market volatility of 10 European stock markets by fitting Autoregressive Conditional Heteroskedasticity (ARCH) and Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models. The data was obtained from yahoofinance.com for the period January 1, 2005 to December 31, 2005. The stationarity of the time series was checked through unit root test and then descriptive statistics of different stock indices was obtained. The ARCH model was applied to check the presence of ARCH effect in all return series and GARCH(1, 1) model was used to estimate the return volatility. The results suggested that there was high volatility of returns in the markets during the sample period. The GARCH coefficient of Austria, France, Germany, Hungary, Spain and the United Kingdom was close to 1, which indicates that volatility shocks were quite persistent. The coefficient of the lagged squared returns was also positive for these indices, and it implied that stock market volatility or market operators react more to good news than bad news, or the market is positive about the adoption of IFRS. On the other side, the IFRS adoption news did not affect the volatility of Greece, Italy, the Netherlands and Portugal during the sample period.

Download or read book The introduction of IFRS Consequences for investment decisions written by Simon Falcke and published by GRIN Verlag. This book was released on 2020-07-09 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2019 in the subject Business economics - Investment and Finance, grade: 1,0, Otto Beisheim School of Management Vallendar, language: English, abstract: Starting in 2005, the portion of foreign shareholders in the Dax has risen from 45% to 58% in the last decade. In the same year, the regulation of the European Union from 2002 came into effect which required all listed firms in the European Union to report their consolidated accounts in accordance with the International Financial Reporting Standard (IFRS) from 2005 on instead of each countries’ generally accepted accounting standards (GAAP). This is just one example where the volume of investments increased concurrently with the adoption of IFRS. Therefore, the question arises if the mandatory adoption of IFRS in the EU in 2005 or in other cases significantly affected and continues to affect investment decisions among adopters or third parties. In order to better account for differences between different types of investors and investees, we differentiate between retail investors, institutional investors and corporate finance activities. Moreover, we focus on the consequence of IFRS adoption on equity investment decisions as most research appears to focus on the equity instead of the credit market. Additionally, Lourenco & Branco point out that most research which finds no significant effects of IFRS adoption on investment decisions appears to focus on voluntary adoption before 2005. Thus, this paper mainly focuses on mandatory IFRS adoption. In this context, research suggests that mandatory IFRS adopters experience significant capital markets benefits as well as enhanced foreign institutional ownership and enhanced M&A activity. Ultimately, we observe four overarching drivers behind the aforementioned observations that impact investment decisions across different types of investors and investees.

Download or read book Impact of IFRS Adoption on Financial Decisions Case Study of Indian Information Technology Industry written by Vidya Chandrasekar and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Expansion of business environment in the 1990s changed the financial set up of India from the conventional bank based borrowings to marked based one. This necessitated companies to address global stakeholders. The regulatory requirement of different countries also necessitated companies to do multiple reporting i.e., one as per home country standard and the other as per the host country standard. To overcome multiple reporting and to address global stakeholders, a uniform system of reporting was felt necessary to facilitate comparisons, which resulted in the establishment of International Accounting Standard Board (IASB) which issues International Financial Reporting Standards (IFRS). Certain Indian companies having listed in foreign stock exchanges are reporting IFRS voluntarily in their financial statements. The present study tries to understand the impact of this voluntary adoption of IFRS on the financial decision makers through a case analysis of Wipro Ltd. The analysis compared the ma jor financial parameters under IFRS and Indian GAAP as reported by Wipro Ltd for a period of four years from 2009 -10 to 2012-13. The results postulate an increase in liquidity ratios; interest coverage ratio; marginal increase in debt equity ratio; and no significant increase in profitability ratios except net profit ratio which rose slightly in the year 2013. Overall the results indicate that the adoption of fair value accounting and strict requirement in adhering to accounting standards have strengthened the financial indicators an d provided the decision makers a transparent, true and fair accounting highlighters.

Download or read book IFRS in India written by O. Bhavani and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: International Financial Reporting Standards (IFRS) set by the International Accounting Standards Board (IASB) are adopted by the companies for the preparation of the financial statements. This ensures easy understanding and facilitates comparability of the financial statements of different enterprises of different countries and provides relevant and meaningful information to the various users of the financial statements. In India, the new set of standards which have been converged with IFRS is known as Indian Accounting Standards or Ind AS and will be implemented in India in a phased out manner (Phase 1, 2 and 3) as have been notified by the Ministry of Corporate Affairs on February 25, 2011. The recent announcement made by the Finance Minister in the year 2015 made it mandatory for all the listed companies either to adopt IFRS or converge with effect from the accounting year 2016-17. IFRS is recommended for adoption with several benefits in mind and some of the companies have already adopted new standards and have started reporting accordingly. In this context, the present paper presents an overview of double adoption of IFRS globally by the significant trade forums and the Indian companies which are voluntarily adopting IFRS. It also analyzes the financial implications of adoption of IFRS by the select companies in India. The study is based on secondary data, and Gray comparability index, t-test and F-test are employed for analyzing the data.

Download or read book Economic Effects of IFRS Adoption in Brazil written by Verônica Santana and published by . This book was released on 2014 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study aims to identify the impact of IFRS adoption in stock price synchronicity of Brazilian capital market through its influence on how much and in which way firm-specific information is incorporated by stock prices. There are divergences in the literature about how IFRS adoption (specially the mandatory adoption) affects synchronicity in countries with poorer institutions. Our results indicate that IFRS adoption in Brazil has reduced stock price synchronicity and, consequently, increased the efficiency of resource allocation and potential portfolio diversification. These findings support the view that IFRS adoption facilitates firm-specific information flows into the market, improving the informational environment. This findings show that investment conditions in Brazil have improved, opening better opportunities for foreign investments on the country, contributing to financial globalization and market integration.

Download or read book The Impacts of IFRS Adoption on Financial Statement Quality for Firms Listed in Indonesia Stock Exchange written by Felizia Arni Rudiawarni and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Objective - the objective of this research is to explain whether the adoption of IFRS in Indonesia has improved accounting information quality. Methodology/Technique - Earnings volatility and discretionary accruals are used to test the scope of earnings management on a set of accounting standard used. The regression of share price and book value per share and net profit per share, along with the explanatory power of the model were used to test the value relevance of the accounting standards applied. Findings - This research finds that no significant difference of earnings management's scope after the mandatory adoption of the IFRS. Moreover, this research also finds that IFRS does not result in higher value relevance. Novelty - This research presents evidence of IFRS convergence from an emerging market point of view, particularly in Indonesia. Focus of this research is to examine the impact of IFRS adoption to financial statement quality using multiple measurements. Type of Paper: Empirical.

Download or read book IAS IFRS written by Vera Palea and published by FrancoAngeli. This book was released on 2006 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Explanatory Process for Adoption of IFRS in Indian Banks written by Santosh Reddy and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In the present times International Financial Reporting Standards (IFRS) has gained momentum due to globalization and liberalization. Multinational companies are setting up businesses in emerging markets and entities in emerging economies are accessing global financial markets to fund their expansions and acquisitions internationally. The first-time adoption of IFRS impacts the financial statements of entities due to differences between local Generally Accepted Accounting Principles (GAAP) and IFRS. The impact of IFRS is perceived to be high for banks due to complexities in IAS 39: Recognition and Measurement of Financial Instruments and Hedge Accounting. This paper discusses the conceptual IFRS adoption process for Indian banks for effective implementation of IFRS.

Download or read book The Effect of International Financial Reporting Standards IFRS Adoption on the Value Relevance of Financial Reporting written by Tatiana Garanina and published by . This book was released on 2019 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - The purpose of this study is to empirically examine the influence of International Financial Reporting Standards (IFRS) adoption by Russian public companies on the value relevance of financial reporting in Russia.Design/methodology/approach - We selected 67 Russian public companies that report both under RAS and IFRS for four consecutive years (2006 - 2009). Research limitations - The main limitation of the paper is the sample, but this can be explained by the fact that only 67 companies in Russia report under two standards (RAS and IFRS). So the sample could not be increased as there are no other companies that fulfill the characteristics of the sample.Findings - The obtained results show that on the Russian market there is no evidence of increased value relevance of financial reporting to external users of financial information after adopting IFRS when comparing and evaluating the two regimes (RAS and IFRS) unconditionally. Such results can be explained by the notion of mock compliance which originates due to the institutional differences between the RAS and IFRS development environments.Originality/value - Adoption of IFRS by companies in emerging markets has been a subject of interest for a lot of researchers, but this is the first research of the kind in the field of value relevance of adoption of IFRS on the Russian market.

Download or read book The Impact of IFRS Adoption on Stock Performance and Financial Indicators written by Ashraf Elsayed Mostafa Elbakry and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book IFRS Adoption and Financial Reporting Quality written by Habeeb Mohamed Nijam and published by . This book was released on 2016 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: Conventional and commonly held wisdom with respect to the adoption of International Financial Reporting Standards (IFRS) is that they lead to improved financial reporting quality and comparability and thereby favorable economic consequences. There are however contradicting evidences disproving this conventional wisdom or rejecting its gross generalization over the entire jurisdictions harmonizing on IFRS. Driven by this fact, quests for knowledge about the dynamics and contexts that lead to differential effects of IFRS get momentum. In an attempt to explore the insight into the effects of international accounting harmonization by way of IFRS adoption, this paper reviews selected literatures on consequences of IFRS adoption. This review discusses some empirical evidences that have been reported in various countries that include Europe, USA, United Kingdom, Germany, Spain, Norway, Greece, Poland, Belgian, France, Italy, Turkey, United Arab Emirates (UAE), Kuwait, Jordan, China, Malaysia, Australia, Hong Kong, New Zealand, Kenya and Nigeria. Our review focuses on the aspects of value relevance, disclosure quality, cost of capital, earning management and financial statement impact due to the IFRS adoption. This review reveals that economic consequences of IFRS adoption significantly differ across jurisdictions though being its impact reported to be positive in majority of cases. There are also notable number of studies that report indifferent and or negative effects of IFRS adoption. When IFRS studies report mixed evidence with respect to value relevance of book value of equity and earing, book value of equity supersedes the earning parameters. IFRS are found to supersede many other domestic financial reporting standards in terms of volume and quality of disclosures in financial statements. This review also obtains that IFRS' impact on the reduction of cost of capital depends on financial reporting incentives, law enforcement, types of legal systems and various other country and capital market specific characteristics. Further, though there are some evidences to the contrary, the quality of earnings reported under IFRS has been established to be superior to that under other local standards.

Download or read book The Effects of the IAS IFRS Adoption in the European Union on the Financial Industry written by Vera Palea and published by . This book was released on 2009 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The effect of disclosure level on the cost of equity is a matter of considerable interest and importance to the financial reporting community. In this research, the effects of the IAS/IFRS adoption in Europe on the cost of equity capital relative to the bank industry have been examined. Previous research has shown that the adoption of the IAS/IFRS reduces information asymmetry between investors and firms. Economic theory claims that a commitment to increased level of disclosure reduces the cost of capital component that arises from information asymmetries. This study shows empirically that the increase in the level of disclosure provided by the adoption of the IAS/IFRS in the European Union by Regulation 1606/2002 has led effectively to a lower cost of capital. From a practical point of view, these findings provide evidence that the Regulator's purpose of fostering a cost-efficient functioning of the capital market for firms could be considered as accomplished. Furthermore, they point out that firms which implemented the IAS/IFRS have gained a comparative advantage on the equity market over firms still adopting accounting standards based on the IV and VII European Directives.

Download or read book A Comparative Study of Segment Reporting Under AS 17 and IFRS 8 written by D.D. Bedia and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the benefits of adopting International Financial Reporting Standards (IFRS) by Indian entities and further examines the effect of adoption of IFRS on companies' segment reporting as compared to segment reporting under Indian GAAP (IGAAP). It studies the impact of adoption of IFRS 8 by taking the case of M/s Sify Technologies Ltd., an Indian listed entity and presents a detailed analysis of differences in the segment disclosures data under the new standard IFRS 8 vis-à-vis the Indian Accounting Standard, AS-17. It is observed from the study that there are certain marked deviations in segment profit and loss as disclosed by the financial statements of M/s Sify Technologies Ltd. as reported under IGAAP and those reported under IFRS. The major difference between the two reporting is the information given and the presentation requirement. Further, under IFRS 8, the disclosure requirements related to geographical segments are significantly reduced or in most of the cases completely lost, which is a major concern to stakeholders. Further, there will be lack of comparability of segment information between companies as IFRS provides discretion to the Chief Operating Decision Maker to choose what to disclose and the manner in which the information can be disclosed.

Download or read book Insight Towards Adoption of International Financial Reporting Standards IFRS in India written by Dr. Vani Ramesh and published by . This book was released on 2019 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study aims at understanding the perception towards adoption of International, Financial Reporting Standards (IFRS) in India. For the purpose, the Hofstede dimensions on perception is reviewed. The globalization creates an increased need for communication in the terms of language, awareness of culture differences and domestic customs. Moreover, the financial communication such as accounting and financial results is just as important for business leaders and employees to master. Hence Proponents of International Financial Reporting Standards (IFRS) claim that mandating a uniform set of accounting standards improves financial statement comparability that in turn attracts greater cross-border investment. Ministry of Corporate Affairs (MCA) has decided to go for full convergence of IFRS by 2018 through IND AS. Using Hofstede dimensions along with economic growth, demographic profile of respondents, economic openness and relative capital market size the logit regressions are analyzed. Structural Equation Modelling (SEM) is applied to test the confirmation factor analysis (CFA), accordingly path diagram is drawn. The primary data was collected with well structed questionnaire from auditors, accounting professionals working in companies and academicians Drop-off survey was conducted and the targeted sample size is 400 across India. The results indicate that as India is developing country, the financial structure is more likely to adopt IFRS. The Hofstede dimensions do have a significant impact as an exploratory variable, suggesting that Indian financial system do need to be more optimistic in adopting these standards to meet the global requirements of the stakeholders.

Download or read book Essays on the Economic Consequences of Mandatory IFRS Reporting around the world written by Ulf Brüggemann and published by Springer Science & Business Media. This book was released on 2011-08-31 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ulf Brüggemann discusses and empirically investigates the economic consequences of mandatory switch to IFRS. He provides evidence that cross-border investments by individual investors increased following the introduction of IFRS.