Premium
Impact of International Financial Reporting Standard adoption on key financial ratios
Author(s) -
Lantto AnnaMaija,
Sahlström Petri
Publication year - 2009
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/j.1467-629x.2008.00283.x
Subject(s) - international financial reporting standards , accounting , fair value , business , financial accounting , accounting standard , key (lock) , mark to market accounting , financial ratio , accounting information system , value (mathematics) , accounting management , finance , ecology , machine learning , computer science , biology
Abstract Although previous research has investigated the economic consequences of International Financial Reporting Standard (IFRS) adoption, there is little evidence on the impact of IFRS adoption on key financial ratios. To fill this gap, we examine this issue in a continental European country (Finland). Our results show that the adoption of IFRS changes the magnitude of the key accounting ratios. Moreover, we extend the literature by showing that the adoption of fair value accounting rules and stricter requirements on certain accounting issues are the reasons for the changes observed in accounting figures and financial ratios.