Financial Statement Effects of Adopting International Accounting Standards: The Case of Greece

40 Pages Posted: 4 May 2011

See all articles by Athianos Stergios

Athianos Stergios

Technological Education Institute (TEI) of Central Macedonia

Athanasios Vazakidis

University of Macedonia

Nikolaos Dritsakis

University of Macedonia

Date Written: December 16, 2005

Abstract

This paper investigates the effects of adopting International Accounting Standards (IAS) on financial statements and their value relevance for a sample of Greek firms during 2003-2004. By implementing an innovative research design, we make a comparison between accounting results reported under Greek accounting rules (Greek GAAP) with those under IAS for the same set of years and document how IAS adoption changes key financial measures and the value relevance of financial statement information. Greek accounting system is stakeholder-oriented and usually viewed as a historical cost accounting model that gives emphasis in income smoothing while IAS is shareholder-oriented and generally viewed as fair value accounting model that gives emphasis in balance sheet valuation. According to these realizations, we find that total assets and book value of equity as well as variability of book value and net income are significantly higher under IAS than Greek GAAP. In addition, we find that book value (net income) plays a greater (lesser) valuation role under IAS than under Greek GAAP. Finally, we find that while the IAS adjustments to book value are generally value relevant, the adjustments to net income are generally value irrelevant.

Keywords: IAS, IFRS, GAAP, IAS Adoption

Suggested Citation

Stergios, Athianos and Vazakidis, Athanasios and Dritsakis, Nikolaos, Financial Statement Effects of Adopting International Accounting Standards: The Case of Greece (December 16, 2005). Available at SSRN: https://ssrn.com/abstract=1829348 or http://dx.doi.org/10.2139/ssrn.1829348

Athianos Stergios (Contact Author)

Technological Education Institute (TEI) of Central Macedonia ( email )

TEI of Serres, Terma Magnesias
Serres, 62124
Greece

Athanasios Vazakidis

University of Macedonia ( email )

156 Egnatia St.
P.O. 1591
Thessaloniki, 54006
Greece

Nikolaos Dritsakis

University of Macedonia

156 Egnatia St.
P.O. 1591
Thessaloniki, 54006
Greece

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