China, the second largest insurance market in the world, has decided to adopt IFRS 17 over a three year transition period. The report includes research results on the adoption of IFRSs. The report includes a section on adoption of IFRSs. The statement also describes how the two organisations will work together to support adoption of IFRS in Japan.
The guide provides an overview of the adoption of IFRS in countries and other jurisdictions around the world. There is no entry in the Offical Journal yet, however, the European Commission EC communicated the decision by press release. Banks and insurance companies already report under IFRSs. To facilitate the transition, the SOCPA has published a series of booklets in the Arabic language that indicate the most important requirements for the preparation of financial statements when applying international standards for the first time and explain the most important differences between IFRSs and the standards currently applied in Saudi Arabia.
The list has recently be updated. The International Federation of Accountants IFAC has submitted 12 recommendations for endorsement by the Group of Twenty G20 , urging action on issues impacting the G20 priorities of robust, inclusive growth.
Compliance to the new law is required no later than 1 July These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line. The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.
IAS plus. Login or Register Deloitte User? Welcome My account Logout. Search site. Toggle navigation. About this information The table below summarises our understanding of the use of International Financial Reporting Standards as the primary GAAP by domestic listed and unlisted companies in their consolidated financial statements for external financial reporting.
This means that the basis of presentation note and auditor's report indicate that the financial statements are prepared on the basis of IFRSs. Access to this information is subject to our terms of use.
If you have additions or corrections to this table, please send us an email. Following the table is a list of jurisdictions for which we are seeking information. Note: click here or scroll down to end of table for column totals. For others, IFRSs permitted.
IFRSs not permitted in separate company statements. Optional for listed companies prior to Yes, except Other unlisted companies are permitted to use IFRSs. IFRSs permitted in both consolidated and separate statements of other companies. Statutory accounts that conform to national GAAP are also required. IFRSs will be required for all other unlisted entities starting IFRSs permitted in separate company statements except for very small, insurance companies, and some regulated companies.
This means that, for unlisted companies, IFRSs are permitted in consolidated statements, prohibited in separate company statements. However the law requiring IFRSs is under legal challenge. IFRSs permitted in the separate financial statements of companies that have applied for stock exchange listing or whose parent uses IFRSs, prohibited in the separate financial statements of other companies.
IFRSs permitted in separate company statements of a company that is within the scope of a consolidated group that uses IFRSs, not permitted for other companies. As a French Department, Reunion follows French accounting requirements.
IFRSs not permitted. Note 3 Hong Kong has adopted national standards that are identical to IFRSs, including all recognition and measurement options, but in some cases effective dates and transition are different. Because of translation delays, these companies do not comply with IFRSs, and the audit report and basis of presentation footnote state that the financial statements comply with "IFRSs as adopted for use in Turkey". Note 8 Since April , the Securities Exchange Board of India SEBI has provided an option to listed entities having subsidiaries to submit their consolidated financial results either in accordance with the accounting standards specified in section 3C of the Companies Act, , or in accordance with IFRS with required reconciliations.
Corporates having a net worth of less than Rs. The new road map exempts banking, insurance and non-banking finance companies. The roadmap still needs to be officially notified, which is expected "shortly".
Related news IFRS 17 adoption progresses around the world 30 Dec China, the second largest insurance market in the world, has decided to adopt IFRS 17 over a three year transition period. All Related. See Legal for more information. DTTL also referred to as "Deloitte Global" and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients.
Please see www. Correction list for hyphenation These words serve as exceptions. The table below summarises our understanding of the use of International Financial Reporting Standards as the primary GAAP by domestic listed and unlisted companies in their consolidated financial statements for external financial reporting.
Earlier research, for example, Dechow and Oei et al. Numerous studies have tested the trend of accounting quality after IFRS adoptions.
Results were contradictory. Some findings documented that IFRS adoption will lead to increased accounting quality in terms of: variability and persistence of earnings Doukakis, ;. Gassen and Sellhorn found that German firms that voluntarily adopted IFRS are more likely to have more persistent and more conservative earnings.
Barth et al. Chalmers et al. However, other stream of research has documented that IFRS does not lead to enhanced quality of accounting information Bryce et al. Hassan et al. Studies in developing countries also revealed the stagnant movements of accounting qualities in post-IFRS period. For example, Outa investigated whether there is a link between increased accounting quality in post-IFRS adoption in Kenya and failed to confirm such a relationship.
These findings challenge a postulate that IFRS would limit managerial discretionary behavior, and thus, stating otherwise is ill-advised. A study by Ball et al. Based on the conflicting findings, we propose the following null hypothesis: H1. The accounting quality dimensions do not increase after the IFRS implementation. Accounting quality is basically multi-dimensional in nature and cannot be simply measured using one indicator.
Therefore, we use several measures of accounting quality, including: performance-matched discretionary accruals;. As previously mentioned, there are several attributes among which accounting quality can be measured, namely: accruals quality;. Further sections elaborate the models and methods to test the hypothesis regarding IFRS impact on those accounting quality attributes.
The current study uses the univariate i. This study bases its timely loss recognition on the work of Basu in which the earning is regressed on the negative returns as a proxy of bad news , the returns and the interaction product of negative returns and returns.
Using multivariate regression, we also control for the presence of firm-level variables that may lead to further bias to the timely loss recognition, including the leverage, market to book ratio and size. To test whether the corporate recognizes the losses faster for the voluntary firms rather than the mandatory firms in adopting the IFRS, the model is expressed as follows:.
To figure out whether IFRS depends on timely loss recognition, the current study also introduces three-way interaction products.
Earnings smoothing can also be regarded as the properties of accounting quality Barth et al. The logic is straight-forwardly simple.
When the corporate does not engage in the earnings smoothing activities, there should be more volatilities and fluctuations in the reported earnings. The first formula of the earnings smoothing can be described as follows Barth et al. Other independent variables are defined as in model 3. Both models 3 and 4 are used to measure the discretionary behavior of the corporate to smooth the earnings volatilities. Ahmed et al. The last measure of accounting quality is the earnings persistence.
In this model, predicting future earnings is the key element in measuring the persistence. This study uses the widely accepted model for earnings persistence Ben-Nasr et al. The current study collected the industrial sectors in the pre-post-IFRS convergence, consisting of 3, firm-years observation from unbalanced samples. The sample industrial classification and its frequency is displayed in Table I.
More than 17 per cent of the whole population comes from materials industry, while in contrary, the utility firms only consist of two companies, with a 0. Firms from capital goods and food and beverage are also dominant in our study, which account for 42 companies Table II shows the correlation coefficients of some important variables used in models 1 - 4.
Some of the variables used, for example, current assets, current liabilities, CFO, sales, PPE, working capital, sales change, lag and lead CFOs, as expected, and have strong positive significant correlations.
The correlation coefficient above can also be used as a preliminary check for the probable multicollinearity and for gaining insights of the temporary relationship patterns among key variables. Despite the fact that there is some high correlation among variables, there are no serious issues on multicollinearity that may bias estimated parameters used to test the hypotheses. Those highly correlated variables e.
Those high correlation values are expected and do not influence the validity of the main findings. However, we also found that accruals quality does not have a certain pattern during the convergence transition phases. Another dimension of accounting quality that is worth researching is earnings smoothing.
As previously mentioned, we use managerial discretionary behavior to smooth their earnings properties as developed by Ahmed et al. The managerial discretionary behavior is reflected in the ratio of variance of net income and cash flow from operations. Therefore, a smaller ratio indicates greater tendency to engage in earnings smoothing. Nevertheless, univariate test of difference indicates that at 5 per cent level, there is no difference of earnings smooting between pre- and post-IFRS convergence.
More importantly, we also found that the interaction coefficient of return and dummy RDR is 0. It implies therefore that accounting conservatism did not significantly exist from until Similarly, the result is persistent even when we control for size effect, when the coefficient of return, dummy and size is Based on rigorous testing, our study indicates that IFRS convergence does increase the accounting quality.
As the economic events tend to fluctuate, current earnings cannot predict future earnings. Eccher and Healy also report that the outcome of the implementation of International Accounting Standards and National Accounting Standards is not different regarding the ability of accruals in explaining future cash flows. A study by Doukakis in Athens Stock Exchange also found that firms in the early adoption of IFRS are not more likely to have a better earnings persistence.
We proposed several explanations for lack of support of accounting quality increase in post-IFRS convergence period. First, compliance of accounting standards IFRS should be increased. Outa also documented earnings quality decrease can be observed for countries with weak enforcements. Shleifer and Vishny argued that enforcement of accounting standards is equally important as the implementation of accounting standards itself. Second, we also speculate that the failure of IFRS convergence in enhancing accounting qualities is due to lack of local culture and values that were incorporated in accounting standards.
For example, Guan and Pourjalali found that values and cultures i. Third, the IFRS convergence process in Indonesia was conducted gradually and was finished in , in which the gradual process may hinder the benefits of IFRS adoption. Cai et al. In this paper, we empirically examine whether accounting quality is improved after the convergence process of IFRS. We use 3, firm-year observations from unbalanced samples and use univariate and multivariate testing to test the hypothesis of accounting quality increase following IFRS convergence in Indonesia.
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