Mandatory Ifrs Adoption And Analyst Forecast Accuracy

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Mandatory IFRS Adoption and Analyst Forecast Accuracy

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Author : Matthias Demmer
Publisher :
ISBN 13 :
Total Pages : 61 pages
Book Rating : 4.:/5 (13 download)

Book Synopsis Mandatory IFRS Adoption and Analyst Forecast Accuracy by : Matthias Demmer

Download or read book Mandatory IFRS Adoption and Analyst Forecast Accuracy written by Matthias Demmer and published by . This book was released on 2018 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether the improvement in analyst forecast accuracy around mandatory IFRS adoption is associated with the improvement in the accuracy of financial statement-based forecasts. We find significant out-of-sample improvement in financial statement-based forecast accuracy around mandatory IFRS adoption and significant improvement in analyst forecast accuracy only in countries that made concurrent improvements to financial reporting enforcement. We show that the improvement in analyst forecast accuracy is associated with the improvement in financial statement-based forecast accuracy around IFRS adoption. We also show that analyst forecasts, particularly for firms whose analysts forecast under favorable conditions (i.e., analysts who are less busy with more experience and resources), have a greater association with financial statement-based forecasts after mandatory IFRS adoption in countries with concurrent changes in enforcement. Furthermore, we document that analyst forecasts, particulary for firms whose analysts forecast under unfavorable conditions (i.e., analysts who are busier with less experience and resources), do not fully exploit the predictive ability of financial statements after IFRS adoption for firms in countries without concurrent changes in enforcement. Finally, we find that the analyst underreliance on financial-statement based forecasts is associated with year-ahead stock returns. These results are robust to controlling for disclosure quality and comparability. The findings are important for understanding the impact of mandatory IFRS adoption on the predictive ability of financial statements, and for understanding analysts' use of financial statements around mandatory IFRS adoption.

Does IFRS Adoption Affect Analyst Forecast Behavior?

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Author : Xiaoxiao Song
Publisher :
ISBN 13 :
Total Pages : 181 pages
Book Rating : 4.:/5 (12 download)

Book Synopsis Does IFRS Adoption Affect Analyst Forecast Behavior? by : Xiaoxiao Song

Download or read book Does IFRS Adoption Affect Analyst Forecast Behavior? written by Xiaoxiao Song and published by . This book was released on 2017 with total page 181 pages. Available in PDF, EPUB and Kindle. Book excerpt: The globalization of business and finance has led to the adoption of International Financial Reporting Standards (IFRS) in more than 100 countries, and numerous studies have examined the consequences of IFRS adoption in these countries. Currently, however, U.S. domestic issuers are not required to use IFRS in preparing their financial statements, which makes the study of potential IFRS adoption effects on U.S. domestic issuers difficult. My dissertation uses a unique sample of foreign private issuers that are cross listed in the U.S. and are allowed to use IFRS for their financial statements, so that I can investigate the effect of IFRS adoption on analyst forecast behavior and analyst information precision in the U.S. By comparing this IFRS adoption sample group with another group of U.S. foreign private issuers that use U.S. GAAP for their financial statements, my dissertation examines and answers three research questions. Firstly, whether there are any differences in analyst forecast behavior, such as analyst following, analyst forecast accuracy, and analyst forecast dispersion, between the IFRS group and the U.S. GAAP group. Secondly, whether analyst public and private information precision are affected by foreign private issuers' IFRS adoption. And lastly, whether the IFRS adoption effect is moderated by industry characteristics (whether or not IFRS is the dominant accounting standard in the issuer's industry) and moderated by the level of rule of law in the issuer's home country. Results show that compared with the U.S. GAAP group, the IFRS group generally has lower analyst following, lower analyst forecast accuracy, higher forecast dispersion, and less precise public information precision. In addition, the negative effect of foreign private issuers' IFRS adoption on analyst forecast accuracy is weaker when the issuer's industry is in IFRS dominant industry, while the negative effect of IFRS adoption on analyst following is stronger when the issuer comes from a country with strong rule of law. In essence, my dissertation sheds light on the debate surrounding potential IFRS adoption in the U.S by providing evidence that to some extent, foreign private issuers' IFRS adoption is related to unfavorable analyst forecast behavior and information precision in the U.S. capital market.

Mandatory IFRS Adoption and the Usefulness of Accounting Information in Predicting Future Earnings and Cash Flows

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Author : Siyi Li
Publisher :
ISBN 13 :
Total Pages : 47 pages
Book Rating : 4.:/5 (13 download)

Book Synopsis Mandatory IFRS Adoption and the Usefulness of Accounting Information in Predicting Future Earnings and Cash Flows by : Siyi Li

Download or read book Mandatory IFRS Adoption and the Usefulness of Accounting Information in Predicting Future Earnings and Cash Flows written by Siyi Li and published by . This book was released on 2017 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether the mandatory adoption of International Financial Reporting Standards (IFRS) has changed the usefulness of accounting information in predicting future earnings and cash flows out-of-sample. Using a sample of firms from European Union countries that mandatorily adopted IFRS in 2005, we find the out-of-sample earnings and cash flows forecasts derived from alternative accounting models become significantly more accurate after IFRS adoption. The accuracy, however, varies with the strength of legal and regulatory enforcement. Firms in strong enforcement countries experience larger improvements in earnings forecast accuracy than firms in weak enforcement countries but the opposite happens for cash flow forecasts. Accruals are useful in the prediction of both earnings and cash flows, but again their usefulness varies with the strength of the legal and regulatory environment. Portfolios of stocks based on the out-of-sample forecasts earn economically significant 12-month ahead hedge returns after IFRS adoption, which corroborates the detected forecast accuracy improvements. Overall, the study contributes to the IFRS literature by providing new evidence that an important dimension of accounting quality, predictive ability, has improved after mandatory IFRS adoption.

Which Analysts Benefited Most from Mandatory IFRS Adoption in Europe?

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Author : Christof Beuselinck
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

Book Synopsis Which Analysts Benefited Most from Mandatory IFRS Adoption in Europe? by : Christof Beuselinck

Download or read book Which Analysts Benefited Most from Mandatory IFRS Adoption in Europe? written by Christof Beuselinck and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether financial analysts' research structure and portfolio selection choices helped in improving relative earnings forecast accuracy around mandatory IFRS adoption in Europe. Using a sample of 68,665 one-year ahead forecasts for 1,980 publicly listed firms, we find that market-wide mandatory IFRS adoption in the European Union resulted in a significant improvement in the relative forecast accuracy of sector specialists compared to generalists, while country specialists retained a relative accuracy advantage independent of the period of study. Moreover, sector specialists outperformed generalists especially for firms with large local GAAP to IFRS income reconciliations in the first-time IFRS adoption year and when analysts' research portfolios prior to IFRS adoption exhibited high variability in local GAAP reporting practices. Additional analysis indicates that IFRS enabled analysts to initiate coverage of more firms, especially smaller ones, in their sector of specialization. Overall, our results are consistent with the notion that mandatory IFRS adoption in Europe reduced information processing costs and enlarged the within-industry valuation scope.

Essays on the Economic Consequences of Mandatory IFRS Reporting around the world

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Author : Ulf Brüggemann
Publisher : Springer Science & Business Media
ISBN 13 : 3834969524
Total Pages : 162 pages
Book Rating : 4.8/5 (349 download)

Book Synopsis Essays on the Economic Consequences of Mandatory IFRS Reporting around the world by : Ulf Brüggemann

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.

Equity Valuation and Analysis with EVal

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Author : Russell James Lundholm
Publisher : McGraw-Hill/Irwin
ISBN 13 : 9780073309699
Total Pages : 0 pages
Book Rating : 4.3/5 (96 download)

Book Synopsis Equity Valuation and Analysis with EVal by : Russell James Lundholm

Download or read book Equity Valuation and Analysis with EVal written by Russell James Lundholm and published by McGraw-Hill/Irwin. This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: While focusing on the underlying theories of financial analysis and valuation, this work aims to answer the question, "What is this company really worth?". It takes the view that sound forecasts of financial statements are the key input to a good valuation, and that other aspects of the valuation process are mechanical.

U.S. GAAP Versus IFRS

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Author : Shrikant P. Jategaonkar
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

Book Synopsis U.S. GAAP Versus IFRS by : Shrikant P. Jategaonkar

Download or read book U.S. GAAP Versus IFRS written by Shrikant P. Jategaonkar and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Beginning in fiscal 2007, the U.S. Securities and Exchange Commission (SEC) allowed foreign companies traded on U.S. stock exchanges to report under International Financial Reporting Standards (IFRS) or U.S. Generally Accepted Accounting Principles (U.S. GAAP). This study investigates if analyst forecast accuracy is affected by the reporting standards used. If U.S. GAAP and IFRS are equivalent sets of high-quality standards, as purported by the IASB and SEC, then there should not be any difference in forecast accuracy. If, on the other hand, analyst forecast accuracy differs based on the accounting standards used, the U.S. GAAP and IFRS may not be comparable. With a sample of 366 firm-years from 2007 to 2010, we find that there are no significant differences in forecast errors for companies reporting under IFRS versus U.S. GAAP. This result indicates that the information provided by both sets of standards is sufficient for sophisticated users. This is especially important because foreign companies traded on U.S. exchanges will be electing between these two alternative reporting methods into the foreseeable future. In addition, there is some discussion that the SEC may allow U.S. companies to report under either method, so this study informs that debate. Our results indicate that the predictive models employed by analysts are equally effective when based on financial results reported under U.S. GAAP or IFRS.

Mandatory Adoption of IFRS and Analysts' Forecasts Information Properties

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Author :
Publisher :
ISBN 13 :
Total Pages : 51 pages
Book Rating : 4.:/5 (838 download)

Book Synopsis Mandatory Adoption of IFRS and Analysts' Forecasts Information Properties by :

Download or read book Mandatory Adoption of IFRS and Analysts' Forecasts Information Properties written by and published by . This book was released on 2010 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Does Mandatory IFRS Adoption Improve the Information Environment?

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Author : Joanne Horton
Publisher :
ISBN 13 :
Total Pages : 48 pages
Book Rating : 4.:/5 (667 download)

Book Synopsis Does Mandatory IFRS Adoption Improve the Information Environment? by : Joanne Horton

Download or read book Does Mandatory IFRS Adoption Improve the Information Environment? written by Joanne Horton and published by . This book was released on 2010 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effect of mandatory International Financial Reporting Standards ('IFRS') adoption on firms' information environment. We find that after mandatory IFRS adoption consensus forecast errors decrease for firms that mandatorily adopt IFRS relative to forecast errors of other firms. We also find decreasing forecast errors for voluntary adopters, but this effect is smaller and not robust. Moreover, we show that the magnitude of the forecast errors decrease is associated with the firm-specific differences between local GAAP and IFRS. Exploiting individual analyst level data and isolating settings where investors would benefit more from either increased comparability or higher quality information, we document that the improvement in the information environment is driven both by information and comparability effects. These results are robust to variations in the measurement of information environment quality, forecast horizon, sample composition and tests of earnings management.

Does Mandatory IFRS Adoption Improve the Information Environment?

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Author : Joanne Horton
Publisher :
ISBN 13 :
Total Pages : 57 pages
Book Rating : 4.:/5 (129 download)

Book Synopsis Does Mandatory IFRS Adoption Improve the Information Environment? by : Joanne Horton

Download or read book Does Mandatory IFRS Adoption Improve the Information Environment? written by Joanne Horton and published by . This book was released on 2013 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: More than 120 countries require or permit the use of International Financial Reporting Standards (lsquo;IFRS') by publicly listed companies on the basis of higher information quality and accounting comparability from IFRS application. However, the empirical evidence about these presumed benefits are often conflicting and fail to separate between information quality and comparability. In this paper we examine the effect of mandatory IFRS adoption on firms' information environment. We find that after mandatory IFRS adoption consensus forecast errors decrease for firms that mandatorily adopt IFRS relative to forecast errors of other firms. We also find decreasing forecast errors for voluntary adopters, but this effect is smaller and not robust. Moreover, we show that the magnitude of the forecast errors decrease is associated with the firm-specific differences between local GAAP and IFRS. This finding suggests that it is IFRS adoption rather than a correlated unobservable factor that is causing forecast errors to decrease. Exploiting individual analyst level data and isolating settings where analysts would benefit more from either increased comparability or higher quality information, we document that the improvement in the information environment is driven both by information and comparability effects. These results suggest that mandatory IFRS adoption has improved the quality of information intermediation in capital markets and as a result firms' information environment by increasing both information quality and accounting comparability.

Earnings Quality

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Author : Jennifer Francis
Publisher : Now Publishers Inc
ISBN 13 : 1601981147
Total Pages : 97 pages
Book Rating : 4.6/5 (19 download)

Book Synopsis Earnings Quality by : Jennifer Francis

Download or read book Earnings Quality written by Jennifer Francis and published by Now Publishers Inc. This book was released on 2008 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.

COMPANY VALUATION UNDER IFRS - 3RD EDITION

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Author : Nick Antill
Publisher : Harriman House Limited
ISBN 13 : 0857197770
Total Pages : 286 pages
Book Rating : 4.8/5 (571 download)

Book Synopsis COMPANY VALUATION UNDER IFRS - 3RD EDITION by : Nick Antill

Download or read book COMPANY VALUATION UNDER IFRS - 3RD EDITION written by Nick Antill and published by Harriman House Limited. This book was released on 2020-02-11 with total page 286 pages. Available in PDF, EPUB and Kindle. Book excerpt: Revised and updated. The influence of International Financial Reporting Standards (IFRS) on accounting across the world is stronger than ever. Most importantly, this stems from the mandatory adoption of IFRSs in many parts of the world, including Europe, Canada, Australia, Brazil and, with some relatively small exceptions, China. Additionally, foreign registrants in the US are also permitted to use IFRS by the SEC. The impact of IFRSs also extends to accounting developments as the IASB and the FASB work closely together to formulate new standards such as those recently issued on leasing and revenue recognition. It is clear that investors, analysts and valuers need to understand financial statements produced under IFRS to feed in to their valuations and broader investment decisions. Written by practitioners for practitioners, the book addresses valuation from the viewpoint of the analyst, the investor and the corporate acquirer. It starts with valuation theory: what is to be discounted and at what discount rate? It explains the connection between standard methodologies based on free cash flow and on return on capital. And it emphasizes that, whichever method is used, accurate interpretation of accounting information is critical to the production of sensible valuations. The authors argue that forecasts of cash flows imply views on profits and balance sheets, and that non-cash items contain useful information about future cash flows - so profits matter. The book addresses the implications for analysis, modelling and valuation of key aspects of IFRS, all updated for recent developments, including: - Pensions - Stock options - Derivatives - Provisions - Leases - Revenue recognition - Foreign currency The text also sets out the key differences between IFRS and US GAAP treatments of these issues, in addition to their implications for analysis. A detailed case study is used to provide a step-by-step valuation of an industrial company using both free cash flow and economic profit methodologies. The authors then address a range of common valuation problems, including cyclical or immature companies, as well as the specialist accounting and modelling knowledge required for regulated utilities, resource extraction companies, banks, insurance companies, real estate companies and technology companies. Accounting for mergers and disposals is first explained and then illustrated with a detailed potential acquisition.

The Routledge Companion to Accounting, Reporting and Regulation

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Author : Carien van Mourik
Publisher : Routledge
ISBN 13 : 113624350X
Total Pages : 568 pages
Book Rating : 4.1/5 (362 download)

Book Synopsis The Routledge Companion to Accounting, Reporting and Regulation by : Carien van Mourik

Download or read book The Routledge Companion to Accounting, Reporting and Regulation written by Carien van Mourik and published by Routledge. This book was released on 2013-10-01 with total page 568 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial accounting, reporting and regulation is a vast subject area of huge global importance, with interest rising significantly in the light of the ongoing global financial crisis. The authors begin with a broad overview of the subject of accounting, setting the stage for a discussion on the theoretical and practical issues and debates regarding financial reporting, which are expanded on in the second part of the book. This includes how to define the reporting entity, recognition and measurement of the elements of financial statements, fair values in financial reporting and the costs and benefits of disclosure. The third part assesses the interest, need and theories behind the accounting, reporting and regulation industry, while parts four and five look at the institutional, social and economic aspects; with issues such as accounting for environmental management and, accounting regulation and financial reporting in Islamic countries, both issues of ever increasing importance. This authoritative Companion presents a broad overview of the state of these disciplines today, and will provide a comprehensive reference source for students and academics involved in accounting, regulation and reporting.

Mandatory IFRS Adoption and Changes in Default Prediction Accuracy

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Author : Elizabeth F. Gutierrez
Publisher :
ISBN 13 :
Total Pages : 48 pages
Book Rating : 4.:/5 (13 download)

Book Synopsis Mandatory IFRS Adoption and Changes in Default Prediction Accuracy by : Elizabeth F. Gutierrez

Download or read book Mandatory IFRS Adoption and Changes in Default Prediction Accuracy written by Elizabeth F. Gutierrez and published by . This book was released on 2017 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study tests for changes in default prediction accuracy following the country-level switch to International Financial Reporting Standards (IFRS) in 20 European Union (EU) and nonEU jurisdictions. Using a default prediction model that combines both accounting and market inputs, we find that compared to a control group of non-adopters, IFRS adopters do not benefit from the international standards in terms of default prediction accuracy. Further cross-sectional analyses of companies from adopting jurisdictions in the post-adoption period show that voluntary adopters and companies domiciled in jurisdictions with large distances between their local GAAP and IFRS have higher default prediction accuracy. Higher enforcement is associated with higher default prediction accuracy in the EU and with lower default prediction accuracy in non-EU jurisdictions. The results add to the literature on the consequences of IFRS adoption and speak to the performance of default prediction models across jurisdictions, given a change in accounting regulation.

Economics and Political Implications of International Financial Reporting Standards

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Author : Uchenna, Efobi
Publisher : IGI Global
ISBN 13 : 1466698772
Total Pages : 434 pages
Book Rating : 4.4/5 (666 download)

Book Synopsis Economics and Political Implications of International Financial Reporting Standards by : Uchenna, Efobi

Download or read book Economics and Political Implications of International Financial Reporting Standards written by Uchenna, Efobi and published by IGI Global. This book was released on 2016-03-08 with total page 434 pages. Available in PDF, EPUB and Kindle. Book excerpt: International Financial Reporting Standards (IFRS) are internationally-recognized financial reporting guidelines regulated by the International Accounting Standards Board (IASB) to ensure that uniformity exists in the global financial system. In addition to regulating financial reporting, the adoption of IRFS has been shown to impact the flow of foreign capital and trade. Economics and Political Implications of International Financial Reporting Standards focuses on the consequences and determinants of the adoption of the International Financial Reporting Standard (IFRS), which has remained a top issue in International Accounting. This timely publication brings to the forefront issues related to the political and economic influences and impacts of IFRS in addition to providing a platform for further research in this area. Policy makers, academics, researchers, graduate-level students, and professionals across the fields of management, economics, finance, international relations, and political science will find this publication pertinent to furthering their understanding of financial reporting at the global level.

Financial Reporting and Disclosure Practices

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Author : Peddina Mohana Rao
Publisher : Deep and Deep Publications
ISBN 13 : 9788176292030
Total Pages : 388 pages
Book Rating : 4.2/5 (92 download)

Book Synopsis Financial Reporting and Disclosure Practices by : Peddina Mohana Rao

Download or read book Financial Reporting and Disclosure Practices written by Peddina Mohana Rao and published by Deep and Deep Publications. This book was released on 2000 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Analysts' Forecast Accuracy and the Presentation of Mandated Accounting Changes

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Author : Charles Patrick Fort
Publisher :
ISBN 13 :
Total Pages : 176 pages
Book Rating : 4.:/5 (329 download)

Book Synopsis Analysts' Forecast Accuracy and the Presentation of Mandated Accounting Changes by : Charles Patrick Fort

Download or read book Analysts' Forecast Accuracy and the Presentation of Mandated Accounting Changes written by Charles Patrick Fort and published by . This book was released on 1992 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt: