IMPACT OF IFRS ON ACCOUNTING DATA – GRAY INDEX OF CONSERVATISM APPLIED TO SOME EUROPEAN LISTED COMPANIES

Costel ISTRATE

Abstract


The Gray index of conservatism (also called index of comparability) is a good instrument to assess differences between two or more set of accounting standards. I use this index to measure the impact of the compulsory application of IFRS in Europe, in 2005. The sample contains data from almost 600 companies listed on Euronext markets in 2005 (Amsterdam, Bruxelles, Lisbon, and Paris). The paper analyzes some accounting numbers as equity, net income, leverage, return on equity and return on assets. The results confirm that Belgian, French, and Portugal former GAAP were more conservative than IFRS. In some cases, for all the countries the IFRS numbers seem to be much less conservative.

Full text: PDF

Keyword(s)


transition to IFRS, Gray index of comparability, equity, net income, ROA/ROE, leverage

JEL Codes


M41

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