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Characteristics of UK firms related to timing of adoption of Statement of Standard Accounting Practice No. 20

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  • George Emmanuel Iatridis
  • Nathan Lael Joseph

Abstract

This study examines whether the timing of adoption of the UK Statement of Standard Accounting Practice No. 20 ‘Foreign Currency Translation’ depended on firms’ financial characteristics. Consistent with US studies, we find that early adopters tended to be larger firms, and that variables, such as growth options, profitability, leverage and management payout, have strong predictive power. In general, the decision to adopt the Statement of Standard Accounting Practice No. 20 did not appear to adversely affect the profitability measures or dividend payout. Firms tended to adopt when the adverse economic consequences of the adoption were likely to be minimal. They also appeared to defer the adoption of the standard to influence their financial performance and, hence, to achieve certain corporate financial objectives.

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  • George Emmanuel Iatridis & Nathan Lael Joseph, 2006. "Characteristics of UK firms related to timing of adoption of Statement of Standard Accounting Practice No. 20," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 46(3), pages 429-455, September.
    • Handle: RePEc:bla:acctfi:v:46:y:2006:i:3:p:429-455
    DOI: 10.1111/j.1467-629X.2006.00176.x
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    1. Paul E. Holt, 2013. "Critical Elements of Foreign Currency Translation: A Worldwide Informational and Accounting Problem," American Journal of Economics and Business Administration, Science Publications, vol. 5(2), pages 56-64, November.
    2. Paul E. Holt, 2012. "Some Effects of Alternative Foreign Currency Translation Methodologies on two Short-Term Liquidity Ratios," American Journal of Economics and Business Administration, Science Publications, vol. 3(4), pages 645-651, March.

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