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IFRS Adoption in Italy: Which Effects on Accounting Figures and Subjectivity?

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  • Silvano Corbella
  • Cristina Florio
  • Francesca Rossignoli

Abstract

The issue about the degree of subjectivity incidental to financial statements is topical, although it has long been studied and debated. Indeed, such issue recurs anytime new accounting rules or standards are issued. And, of course, it recurs in case of a complete renovation of the accounting system of reference, such as the one that took place in Europe in 2005, when all listed companies were required to repeal their national accounting rules and GAAP, and to adopt IFRS for the preparation of their consolidated financial statements. This study focuses on such transition with specific reference to the Italian context and explores three interconnected issues- a)identification of the changes in the evaluation criteria – from the Italian regulations and GAAP to IFRS – which actually impact on the financial statements presented by Italian companies in the year of transition; b) appreciation of the importance of such impacts, based on (1) how often each adjustment recurs; (2) whether they determine an increase or decrease of accounting figures and (3) how relevant are their effects on the main accounting figures, namely net earnings and net capital; c) discussion about the managerial discretion introduced by the most impacting evaluation criteria identified, in comparison with the Italian provisions and GAAP previously applied. The overall analysis demonstrates that IFRS introduction determined wide impacts on financial statements, affecting most assets and liabilities, but its impacts on accounting figures were less significant than could be expected. In terms ofsubjectivity, however, differences are very significant.

Suggested Citation

  • Silvano Corbella & Cristina Florio & Francesca Rossignoli, 2013. "IFRS Adoption in Italy: Which Effects on Accounting Figures and Subjectivity?," Accounting and Finance Research, Sciedu Press, vol. 2(4), pages 130-130, November.
  • Handle: RePEc:jfr:afr111:v:2:y:2013:i:4:p:130
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    References listed on IDEAS

    as
    1. Corbella, Silvano & Florio, Cristina, 2010. "Issues arising for accounting harmonization: The case of stock options in Italy," Accounting forum, Elsevier, vol. 34(3), pages 184-195.
    2. Silvano Corbella & Cristina Florio, 2010. "Issues arising for accounting harmonization: The case of stock options in Italy," Accounting Forum, Taylor & Francis Journals, vol. 34(3-4), pages 184-195, September.
    3. Ahmed, Kamran & Chalmers, Keryn & Khlif, Hichem, 2013. "A Meta-analysis of IFRS Adoption Effects," The International Journal of Accounting, Elsevier, vol. 48(2), pages 173-217.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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