The Influence of Specific Accounting Differences on the Choice between IFRS or Us Gaap

41 Pages Posted: 15 Jan 2006

See all articles by Sofie Van der Meulen

Sofie Van der Meulen

Catholic University of Lille - IÉSEG School of Management, Lille Campus

Ann Gaeremynck

KU Leuven

Marleen Willekens

Katholieke Universiteit Leuven (KUL)

Abstract

Due to the increased competition on capital markets and given the global importance of US markets, IFRS and US GAAP are competing to become the world standards set. Although comparable in many aspects, IFRS and US GAAP still differ in accounting for some transactions. This paper addresses the question whether specific accounting differences between IFRS and US GAAP determine the individual firm's accounting standard preference. The results show that firms prefer that accounting regime that offers them the largest flexibility (i.e. less disclosure or more measurement options) on relevant accounting items (e.g. R&D expenditures). Furthermore, the flexibility in measurement seems to result in accounting numbers that are significantly valued by investors.

Keywords: Accounting differences, Accounting regime choice, Earnings quality

Suggested Citation

Van der Meulen, Sofie and Gaeremynck, Ann and Willekens, Marleen, The Influence of Specific Accounting Differences on the Choice between IFRS or Us Gaap. Available at SSRN: https://ssrn.com/abstract=874921 or http://dx.doi.org/10.2139/ssrn.874921

Sofie Van der Meulen

Catholic University of Lille - IÉSEG School of Management, Lille Campus ( email )

3 rue de la Digue
Lille, 59000
France

Ann Gaeremynck (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant B-3000
Belgium
3216326921 (Phone)

Marleen Willekens

Katholieke Universiteit Leuven (KUL) ( email )

Naamsestraat 69
B-3000 Leuven
Belgium

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