Are IFRS Income Statements Comparable?

30 Pages Posted: 16 Jan 2011

Date Written: January 15, 2011


One objective of IFRS is to have comparable financial statements, including their presentations, between companies and over time. However, IFRS do not prescribe a particular format for the presentation of the income statement. Some empirical studies show some variety relating to income statement disclosures. Since various models for the income statement presentation exist and since there are (cultural) differences in the application of IFRS, we can reasonably doubt the comparability of IFRS income statements. For a sample of 30 companies from 3 countries we manually analyze income statement comparability. We do so by applying a financial analyst approach by breaking net income down into subtotals and, then, investigate comparability on different income levels. We also consider where particular income statement information is disclosed. We find that on the levels where IFRS requirements exist (level 1 and 2) comparability is (nearly) perfect. But as soon as the required levels are left, comparability deteriorates from level to level. On the individual line item level 6 only 74% of income statements with a functional presentation are comparable. A more detailed IFRS income statement format as currently required and definitions of certain intermediate results (operating profit, for example) would certainly improve comparability.

Keywords: IFRS Income Statement, Comparability, Income Subtotals

JEL Classification: M41

Suggested Citation

Hossfeld, Christopher, Are IFRS Income Statements Comparable? (January 15, 2011). Available at SSRN: or

Christopher Hossfeld (Contact Author)

ESCP Europe ( email )

79 Avenue de la Republique
Paris, 75011
+33149232646 (Phone)

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