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Accounting conservatism in the post-IFRS period: Do provisions matter?

Author

Listed:
  • Ece ERDENER ACAR

    (İzmir Ekonomi Üniversitesi)

  • Serdar ÖZKAN

    (İzmir Ekonomi Üniversitesi)

  • Yasemin ZENGİN KARAİBRAHİMOĞLU

    (İzmir Ekonomi Üniversitesi)

Abstract

Accounting conservatism is an important aspect of financial reporting quality. Considering the tradeoff between relevance and reliability of the accounting information, it is argued that the level of conservatism of financial reports is increased by provision items, which are mainly future oriented estimations. Using a sample of 1,225 firm-year observations from Istanbul Stock Exchange (ISE) between the years 2005-2010, this paper examines the relationship between provisions and conservatism. Overall findings show a positive association between provisions reported under IAS-37 Provisions, Contingent Liabilities and Contingent Assets and both earnings and balance sheet conservatism. This study makes significant contribution to the accounting literature by providing empirical evidence on such associations referring the use of provisions as a proxy for accounting conservatism.

Suggested Citation

  • Ece ERDENER ACAR & Serdar ÖZKAN & Yasemin ZENGİN KARAİBRAHİMOĞLU, 2013. "Accounting conservatism in the post-IFRS period: Do provisions matter?," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 28(324), pages 109-130.
    • Handle: RePEc:iif:iifjrn:v:28:y:2013:i:324:p:109-130
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    Citations

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    Cited by:

    1. Cagnur Kaytmaz Balsari & Secil Varan, 2014. "IFRS implementation and studies in Turkey," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 13(2), pages 373-399, June.

    More about this item

    Keywords

    Conservatism; IFRS; Provisions; Turkey;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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