Disclosure Comparability Under IFRS
34 Pages Posted: 21 Jun 2013
Date Written: June 20, 2013
Proponents of IFRS argue that applying uniform accounting standards leads to comparable financial statements. While previous studies have illustrated that initial IFRS disclosure quality significantly varies upon IFRS adoption, there is little evidence whether disclosures become more comparable after IFRS adoption. Using hand-collected data on 18 disclosure items of European real estate firms over the period 2005 to 2010, we find that disclosures improve and become more comparable over time. Furthermore, our results suggest that an exogenous shock, such as the financial crisis, accelerates the process to better and more comparable disclosure practices. This process is more pronounced and faster for valuation-related than for general disclosures. These results are of interest in the debate whether a principles-based accounting framework such as IFRS can generate comparable information.
Keywords: IFRS, disclosure, comparability
JEL Classification: G10, G18, M41, M42
Suggested Citation: Suggested Citation