Conservatism Analysis on Indian Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS)

International Journal of Multidisciplinary Research and Development, Volume 2, Issue 5, May 2015

20 Pages Posted: 7 Jun 2015

See all articles by Vincent Tawiah

Vincent Tawiah

Griffith University; University of Mysore - Department of Commerce; University of Cape Coast

Muhaheranwa Benjamin

Maharishi Markendeshwar Group of Institution - Maharishi Markandeshwar University (MMU)

Date Written: April 25, 2015

Abstract

The quality of accounting information is the basic objective every accounting standards aims to achieve. It is therefore essential to found out the level of conservative and prudence between Indian GAAP (AS) and Ind.AS (IFRS).

This study has measured the accounting information quality between AS and Ind.AS (IFRS) by using Gray’s Index of Conservatism (GIC) on 5 years consolidated financial statement. F-test and T-test were used to test the hypothesis.

It was found that IFRS provides current and quality information on liquidity ratios than AS reporting. However there was a mix results on the quality of accounting information on leverage.

In general all the profitability ratios GIC signify that, the computed ratios of AS are higher than IFRS ratio in both companies inferring that IFRS is conservative and prudent in profitability reporting, hence accounting information on profitability ratio per IFRS is quality than AS ratios. The hypothesis testing results indicates that averagely the impact of IFRS adoption have similar impact on accounting ratio of both companies but at different timings.

The study therefore concludes that Ind.AS will provide current and quality accounting information on accounting ratios but the quality level will not be same over the years.

Keywords: AS GIC, Ind.AS, IFRS

JEL Classification: IFRS

Suggested Citation

Tawiah, Vincent and Benjamin, Muhaheranwa, Conservatism Analysis on Indian Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) (April 25, 2015). International Journal of Multidisciplinary Research and Development, Volume 2, Issue 5, May 2015. Available at SSRN: https://ssrn.com/abstract=2615335

Vincent Tawiah (Contact Author)

Griffith University ( email )

PMB 50
Gold Coast Queensland 9726
Australia

University of Mysore - Department of Commerce ( email )

Mysore
India

University of Cape Coast ( email )

PMB, UCC, GHANA
Department of English
Cape Coast, Central Region
Ghana

HOME PAGE: http://ucc.edu.gh

Muhaheranwa Benjamin

Maharishi Markendeshwar Group of Institution - Maharishi Markandeshwar University (MMU)

Mullana
Ambala, Haryana 136119
India

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