Implementing IFRS from the perspective of EU publicly traded companies |
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Authors: | Eva K Jermakowicz Sylwia Gornik-Tomaszewski |
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Institution: | a Department of Accounting and Business Law, College of Business, University of Southern Indiana, 8600 University Blvd., Evansville, IN 47712, USA b Department of Accounting and Taxation, The Peter J. Tobin College of Business, St. John's University, 8000 Utopia Parkway, Jamaica, NY 11439, USA |
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Abstract: | This study examines implementation of International Financial Reporting Standards (IFRS) by European Union (EU) companies. All listed EU companies are required to prepare their consolidated financial statements in accordance with IFRS for years beginning on or after January 1, 2005 (Regulation (EC) 1606/2002). The paper provides insight into the IFRS adoption process based on a questionnaire sent to EU-listed companies in 2004. The 112 responses received indicate: (1) a majority of respondents have adopted IFRS for more than just consolidation purposes; (2) the process is costly, complex, and burdensome; (3) companies do not expect to lower their cost of capital by implementing IFRS; (4) the more comprehensive the approach to conversion, the more respondents tend to agree with the benefits and costs of the transition; (5) companies expect increased volatility in financial results; (6) the complexity of IFRS as well as the lack of implementation guidance and uniform interpretation are key challenges in convergence; and (7) a majority of respondents would not adopt IFRS if not required by the EU Regulation. The results of our questionnaire were confirmed by several personal interviews with finance and accounting executives of EU publicly traded companies. |
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Keywords: | IAS regulation IFRS European companies Survey |
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