Determinants Influencing the IFRS Accounting Policy Choices of European Listed Companies

27 Pages Posted: 16 Feb 2013

See all articles by Vicky Cole

Vicky Cole

Vrije Universiteit Brussel

Joël Branson

Vrije Universiteit Brussel VUB

Diane Breesch

Vrije Universiteit Brussel

Date Written: February 14, 2013

Abstract

In this paper we investigated whether or not European listed companies make use of the options offered by the IFRS and if so, which determinants influence these choices and how this affects the de facto comparability of European IFRS financial statements. We analysed the choices of 197 companies from Belgium, Denmark, Finland, France, Germany, the Netherlands and the UK operating in the industries industrial goods and services, financials or technology. We investigated the effect of country, industry, company size, capital structure and the type of auditor on 31 options offered within the IFRS. We found that nine options are rarely used differently. Most options (22 out of 31), however, are used differently. The accounting choices are predominantly influenced by the country of origin, followed by industry and type of auditor. Company size and capital structure do not seem to play an important role. Overall, we found that the European IFRS financial statements are not de facto comparable yet. The contribution of the study is threefold: we identify the options that are not or rarely used and thus could be removed in order to simplify the IFRS, we offer insight into the determinants affecting accounting policy choices made by companies, and we mitigate the idea of de facto comparability of European IFRS financial statements.

Keywords: IFRS, accounting policy choices, European companies

Suggested Citation

Cole, Vicky and Branson, Joël and Breesch, Diane, Determinants Influencing the IFRS Accounting Policy Choices of European Listed Companies (February 14, 2013). Available at SSRN: https://ssrn.com/abstract=2217498 or http://dx.doi.org/10.2139/ssrn.2217498

Vicky Cole (Contact Author)

Vrije Universiteit Brussel ( email )

Pleinlaan 2
Brussels, Brussels 1090
Belgium

HOME PAGE: http://www.vub.ac.be

Joël Branson

Vrije Universiteit Brussel VUB ( email )

Pleinlaan 2
Brussels, 1050
Belgium

HOME PAGE: http://www.vub.ac.be/es

Diane Breesch

Vrije Universiteit Brussel ( email )

Pleinlaan 2
Brussels, Brussels 1050
Belgium

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