Attribute Differences between Us Gaap and IFRS Earnings: An Exploratory Study

46 Pages Posted: 14 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

With the successful completion of the IASC's standards, IFRS and US GAAP were placed as the two pre-eminent world financial reporting frameworks. For years, however, US GAAP was accepted widely as the international set of standards to ensure high quality financial statements. Especially in the US, but also elsewhere, the introduction of IFRS has lead to a discussion on the (relative) quality of both regimes. However, relatively little research has been devoted to the subject. In this study, we address that void and further compare the quality of the two standard regimes using a sample of German New Market firms. Financial statement quality is measured applying multiple earnings attributes traditionally used in accounting research. Consistently throughout our measures, we find that the quality of US GAAP prepared financial statements and IFRS information is overall very comparable. Only with regard to predictive ability of accounting information do we find US GAAP superiority.

Keywords: Earnings quality, Earnings attributes, Accounting regime, Selection bias

Suggested Citation

Van der Meulen, Sofie and Gaeremynck, Ann and Willekens, Marleen, Attribute Differences between Us Gaap and IFRS Earnings: An Exploratory Study. Available at SSRN: https://ssrn.com/abstract=874923 or http://dx.doi.org/10.2139/ssrn.874923

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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