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    Evidence on the impact of International Financial Reporting Standards in New Zealand

    Rainsbury, Liz; San Diego, Josefino S.; Walker, Lyndon

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    Rainsbury - IFRS.pdf (163.7Kb)
    Date
    2010
    Citation:
    Rainsbury, E., San Diego, J., & Walker, L. (2010, May). Evidence on the impact of International Financial Reporting Standards in New Zealand. Paper presented at the Second Quantitative Accounting Research Symposium, Albany, New Zealand.
    Permanent link to Research Bank record:
    https://hdl.handle.net/10652/1675
    Abstract
    Purpose – This paper examines the financial impact from the adoption of international financial reporting standards (IFRS) on New Zealand (NZ) companies. It analyses the effects of IFRS on the accounting numbers reported in financial statements. It also compares the association of NZ IFRS versus NZ GAAP book value of equity and earnings with market values with particular emphasis on smaller listed companies. Design/methodology/approach – The paper examines a sample of New Zealand listed companies that adopted NZ IFRS between 2005 and 2007. Financial statement data under NZ IFRS and the previous generally accepted accounting practice were hand collected from annual reports. The data is analysed using descriptive statistics and linear regression. Findings – The adoption of IFRS resulted in statistically significant increases in earnings, assets and liabilities. The IFRS adjustments were largely as anticipated, but IFRS adoption did not improve the value relevance of the accounting numbers. The value relevance of IFRS accounting numbers was marginally lower than that of NZ GAAP. For small listed companies, and early adopters, IFRS equity adjustments reduced value relevance. Originality/value – The study examines the impact of a major regulatory change in financial reporting by documenting New Zealand’s experience with the changeover. The findings are of relevance to the accounting profession and regulators as they debate whether IFRS should be required for the preparation of external financial statements for small to medium-sized enterprises. enterprises.
    Keywords:
    International financial reporting standards, Value relevance, Earnings, Equity, New Zealand
    ANZSRC Field of Research:
    150101 Accounting Theory and Standards
    Copyright Holder:
    Liz Rainsbury, Josefino San Diego and Lyndon Walker
    Rights:
    This digital work is protected by copyright. It may be consulted by you, provided you comply with the provisions of the Act and the following conditions of use: Any use you make of these documents or images must be for research or private study purposes only, and you may not make them available to any other person. You will recognise the author's and publishers rights and give due acknowledgement where appropriate.
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    • Accounting and Finance Conference Papers [69]

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