Unconditional conservatism under the Chinese version of IFRS

This study explores the level of unconditional conservatism (UNCC) in accounting after China’s convergence with International Financial Reporting Standards (IFRS). Using the intercept of the Basu (1997) model, an overall reduction is found in UNCC under the Chinese version of IFRS. This study is the first attempt to conduct a comprehensive theoretical comparison between old and new Chinese accounting standards (CAS) in terms of UNCC. Additionally, it is the first study on the impact of convergence with IFRS, not the full adoption of IFRS, on UNCC. Finally, the study covers a relatively more extended period than most previous studies, from 1996 to 2017.