75 Pages Posted: 7 Apr 2010 Last revised: 19 Sep 2012
Date Written: March 8, 2012
This study examines whether application of IFRS by non-US firms results in accounting amounts comparable to those resulting from application of US GAAP by US firms. IFRS firms have greater accounting system and value relevance comparability with US firms when IFRS firms apply IFRS than when they applied domestic standards. Comparability is greater for firms that adopt IFRS mandatorily, firms in common law and high enforcement countries, and in more recent years. Earnings smoothing, accrual quality, and timeliness are potential sources of the greater comparability. Although application of IFRS has enhanced financial reporting comparability with US firms, significant differences remain.
Keywords: IAS, IASB, International Accounting Standards, International Accounting Standards Board, International Financial Reporting Standards, US GAAP, Comparability, Comparable Financial Reporting Standards
JEL Classification: G12, G15, M41, M44, M47
Suggested Citation: Suggested Citation
Barth, Mary E. and Landsman, Wayne R. and Lang, Mark H. and Williams, Christopher D., Are IFRS-based and US GAAP-based Accounting Amounts Comparable? (March 8, 2012). Journal of Accounting & Economics, Vol. 54, Issue 1, pp. 68-93, August 2012; Rock Center for Corporate Governance at Stanford University Working Paper No. 78. Available at SSRN: https://ssrn.com/abstract=1585404 or http://dx.doi.org/10.2139/ssrn.1585404
By Ray Ball