Non-IFRS Disclosure and Income Statement Disaggregation

33 Pages Posted: 27 Dec 2018

See all articles by Thomas Jeanjean

Thomas Jeanjean

ESSEC Business School - Department of Accounting and Management Control

Isabelle Martinez

University of Toulouse - Paul Sabatier; LGC

Grégoire Davrinche

Independent

Date Written: December 11, 2018

Abstract

This study investigates the determinants and consequences of non-IFRS disclosure, taking into consideration the fact that firms may publish a disaggregated income statement. We argue that there is a tradeoff between non-IFRS disclosure and the disaggregation of income statement numbers. Our results are based on a sample of French listed companies over the period 2007-2015. We find that non-IFRS earnings are useful to predict future cash flows only for firms providing disaggregated income statements. Conversely, when firms choose to use an aggregated income statement format, non-IFRS adjustments provide no additional information content for financial statement users.

Keywords: Non-GAAP Earnings, Non-IFRS Earnings, Adjusted Earnings, Income Statement Disaggregation, Future Cash Flows

JEL Classification: M41

Suggested Citation

Jeanjean, Thomas and Martinez, Isabelle and Davrinche, Grégoire, Non-IFRS Disclosure and Income Statement Disaggregation (December 11, 2018). Available at SSRN: https://ssrn.com/abstract=3299353 or http://dx.doi.org/10.2139/ssrn.3299353

Thomas Jeanjean (Contact Author)

ESSEC Business School - Department of Accounting and Management Control ( email )

Av Bernard Hirsch
Cergy-Pontoise 95021
France

Isabelle Martinez

University of Toulouse - Paul Sabatier; LGC ( email )

118 Route de Narbonne
Toulouse cedex 9, F-31062
France

Grégoire Davrinche

Independent ( email )

No Address Available

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