IFRS-Reporting Adoption Implication to Accounting

IFRS-Reporting Adoption Implication to Accounting 1
IFRS-REPORTING ADOPTION IMPLICATION TO ACCOUNTING
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IFRS-Reporting Adoption Implication to Accounting 2
Executive summary of the outcome of the chosen topic
This report is based on the paper AASB Research Report No. 3: “the effects of IFRS
adoption in Australia: Evidence from academic research” published in October 2016. The main
of the AASB Research Center is to give thought leadership on the reporting issues. The paper
resulted from the need to help AASB and Financial Council (FRC) to assess the IFRS adoption
in Australia in 2005. Thus a comprehensive literature review was undertaken. The IFRS is the
framework for reporting by all sectors in Australia including not-for-profits and for-profit. The
outcome of this survey constitutes a portion of a bigger review project on IFRS undertaken by
AASB to inform its perspectives on the way IFRS need to be integrated into the ARF in future.
The survey primarily focused on the IFRS adoption impact on publicly-listed Australian firms
and additional capital market stakeholders that is for-profit-sector (Apergis 2015).
Focus significant implications of international accounting from their chosen paper or
chosen annual report
The key finding from this survey and analysis based on the present evidence relating to
the IFRS adoption effects include: Adopting IFRS by the firms in Australia seems to have had
positive results for investors alongside analyst on study on disclosing enhanced analysts
following, and forecast accuracy. Other studies have reported positive results via the
enhancement in the value relevance of the financial reporting following the adoption of the
IFRS, and the decline in the firms’ number involving earnings management. The findings of this
research have also backed the adoption of the goodwill impairment of IFRS and the deferred
taxes regimes as having enhanced quality of accounting (Bond, Govendir and Wells 2016). Other
research, nevertheless, have suggested that the quality of accounting have substantially enhanced
when weighed against the AGAAP and that initial AGAAP treatment for intangible assets that

IFRS-Reporting Adoption Implication to Accounting 3
are identifiable stood increasingly appropriate. The outcome further show that the utilization of
IFRS has seen financial reports being longer yet easier to read. Several studies have also reported
positive outcome of the comparability promotion among the entities in Australia with respect to
the financial reporting practices wither global counterparts. The survey of the literature around
the period of IFRS adoption unearthed a degree of pessimism among the listed firms’ managers
towards various possible gains from the accounting convergence.
In respect of accounting quality, it is noted that some studies have reported positive
results from the shift to goodwill impairment while other studies have shown that alterations to
the internally generated intangible assets’ treatment have decreased the Australia financial report
quality. The shift to goodwill impairment seems to have additional aftermath provided the
obvious rise in the portion of purchase price which companies currentlty allocate to goodwill,
compared to additional assets and other studies outcome showing that either pre-or post-IFRS
adoption still no proof of a connection of the identifiable assets from the combination of business
with the post-acquisition performance.
In regards to readability of financial information, there has been a suggestion that the
IFRS use has seen longer and longer reports with ease of reading. These outcome relating to the
IFRS influence on the Australian financial reporting quality and practices parallels the
conclusion hit by a wider literature scrutiny of the previous empirical study which has consider
the IFRS-accounting quality internationally (Bryce, Ali and Mather 2015). The review of the
literature has further attributed the mixed outcomes to issues of sampling and the utilization of
the diverse quality measures. The issues of sampling has been connected to the fact that many of
research have regarded the outcomes of willful adoption of IFRS on the quality. As observed by
the Chua and Taylor (2008) alongside McLeay (2011), the firms that adopt IFRs willfully could