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The transition to IFRS: disclosures by Portuguese listed companies

Author

Listed:
  • Patricia Teixeira Lopes

    (University of Porto, Faculty of Economics)

  • Rui Couto Viana

    (University of Porto, Faculty of Economics)

Abstract

In the context of the CESR and of the Portuguese market regulator recommendations regarding the disclosure of the impacts of the transition to IFRS, this paper analyses the content of those disclosures by Portuguese listed companies. We found a high degree of variability among the disclosure either regarding the qualitative (narrative explanations of transition) or quantitative (reconciliations) disclosures. The results show that the objective of comparability, relevance and understandability stated in CESR’s recommendation were not achieved. Regarding accounting changes, the analysis shows that the reported impacts by companies confirmed expectations based on prior de jure studies on major impacts of changing from Portuguese GAAP to IFRS; these major impacts regard the recognition of intangibles, the accounting treatment of goodwill and financial instruments. Finally, Gray’s (1980) “conservatism” index was computed using the reconciliated profits to IFRS reported by companies. This analysis shows that Portuguese standards are more conservative than IFRS. This study is relevant to several parties: to the market regulators and policy makers in predicting the level of compliance with IFRS and calling attention for the importance of enforcement mechanisms; to the preparers, auditors and users in identifying the most problematic areas of implementation of IFRS.

Suggested Citation

  • Patricia Teixeira Lopes & Rui Couto Viana, 2008. "The transition to IFRS: disclosures by Portuguese listed companies," FEP Working Papers 285, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:285
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    File URL: http://www.fep.up.pt/investigacao/workingpapers/08.08.05_wp285.pdf
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    References listed on IDEAS

    as
    1. Patricia Teixeira Lopes & Lucia Lima Rodrigues, 2004. "Accounting practices for financial instruments. How far are Portuguese companies from IAS?," FEP Working Papers 150, Universidade do Porto, Faculdade de Economia do Porto.
    2. Sally Aisbitt, 2006. "Assessing the Effect of the Transition to IFRS on Equity: The Case of the FTSE 100," Accounting in Europe, Taylor & Francis Journals, vol. 3(1), pages 117-133, October.
    3. T. Colwyn Jones & Robert Luther, 2005. "Anticipating the Impact of IFRS on the Management of German Manufacturing Companies: Some Observations from a British Perspective," Accounting in Europe, Taylor & Francis Journals, vol. 2(1), pages 165-193, January.
    4. Gray, Sj, 1980. "The Impact Of International Accounting Differences From A Security-Analysis Perspective - Some European Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 64-76.
    5. Alicja Jaruga & Justyna Fijalkowska & Malgorzata Jaruga-Baranowska & Maciej Frendzel, 2007. "The Impact of IAS/IFRS on Polish Accounting Regulations and their Practical Implementation in Poland," Accounting in Europe, Taylor & Francis Journals, vol. 4(1), pages 67-78, June.
    6. Jitka Rychtarikova, 2004. "The case of the Czech Republic," Demographic Research Special Collections, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 2(5), pages 105-138.
    7. Jordi Perramon & Oriol Amat, 2006. "IFRS introduction and its effect on listed companies in Spain," Economics Working Papers 975, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Basu, Sudipta, 1997. "The conservatism principle and the asymmetric timeliness of earnings," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 3-37, December.
    9. Street, Donna L. & Gray, Sidney J. & Bryant, Stephanie M., 1999. "Acceptance and Observance of International Accounting Standards: An Empirical Study of Companies Claiming to Comply with IASs," The International Journal of Accounting, Elsevier, vol. 34(1), pages 11-48.
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    Cited by:

    1. George Iatridis & Konstantia Dalla, 2011. "The impact of IFRS implementation on Greek listed companies," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 7(3), pages 284-303, June.
    2. George Emmanuel Iatridis, 2012. "Voluntary IFRS disclosures: evidence from the transition from UK GAAP to IFRSs," Managerial Auditing Journal, Emerald Group Publishing, vol. 27(6), pages 573-597, June.

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    More about this item

    Keywords

    International Accounting; Disclosure; IAS/IFRS; Portugal;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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