- Volume 15 Issue 12
DOI QR Code
K-IFRS Reconciliations and Predicting Future Earnings
K-IFRS 도입 시점의 전환조정이 이후 기간의 미래이익 예측력에 미치는 영향
- Ji, Sang-Hyun (Division of Business & Commerce, Baekseok University) ;
- Kwak, Young-Min (College of Business Administration, Ulsan University)
- Received : 2017.11.02
- Accepted : 2017.12.20
- Published : 2017.12.28
This Study analyzes the predictability of accounting information from mandatory K-IFRS adoption using the K-IFRS reconciliations information. We use the sample of 2,557 firm-year Korea listed companies belonging to non-financial corporate sector during 2010-2016. Specifically, we examine whether K-IFS reconciliation would improve or reduce the predicting power for future earnings after K-IFRS adoption. The results of empirical analyses show that reconciliation information from discretionary judgement tend to reduce the predicting power of K-IFRS based accounting earnings for future earnings. This result indicates that managers are likely to use the adjustments process to reconcile K-GAAP accounting numbers with corresponding K-IFRS as means to realize the various private utility. This study is expected to provide useful information by suggesting the need for more rigid screening schemes for the K-IFRS reconciliation process and also for adequate measures to be taken to ensure that the interests of the outside investors are properly protected.
K-IFRS;Reconciliations;Accounting earnings;Predicting power;Discretionary judgement
Supported by : 울산대학교
- G. R. Lee, "A Study on Improving Transparency in Accounting for Sustainable Growth of Korean Companies", The Journal of Digital Policy & Management, Vol. 11, No. 12, pp.257-264, 2013.
- H. J. Moon, "A Comparison of Earnings Quality Between KOSPI Firms and KOSDAQ Firms", The Journal of Digital Policy & Management, Vol. 15, No. 1, pp.129-141, 2017.
- S. J. Park, and K. I. Han, "The Effects of Introduction of IFRS (International Financial Reporting Standards) on legacy Accounting Information System: Focusing on financial institution", The Journal of Digital Policy & Management, Vol. 8, No. 3, pp.143-154, 2010.
- Y. M. Kwak, and J. H. Baek, "K-IFRS reconciliations and value relevance of accounting information", Accounting Information Review, Vol. 34, No. 1, pp.93-123, 2016.
- J. Horton, G. Serafeim, "Market reaction to and valuation of IFRS reconciliation adjustments: First evidence from the UK", Review of Accounting Studies, Vol. 15, No. 4, pp.725-751, 2010. https://doi.org/10.1007/s11142-009-9108-5
- S. Wang, M. Welker, "Timing equity issuance in response to information asymmetry arising from IFRS adoption in Australia and Europe", Journal of Accounting Research, Vol. 49 No. 1, pp.257-307, 2011. https://doi.org/10.1111/j.1475-679X.2010.00392.x
- J. H. Choi, "The adoption of IFRS and value relevance of accounting information", Korean Accounting Review, Vol. 38, No. 1, pp.391-424, 2013.
- H. B. Christensen, E. Lee, M. Walker, "Do IFRS reconciliations convey information? The effect of debt contracting", Journal of Accounting Research, Vol. 47, No. 5, pp.1167-1199, 2009. https://doi.org/10.1111/j.1475-679X.2009.00345.x
- Y. Kim, H. Li, S. Li, "Does eliminating the Form 20-F reconciliation from IFRS to U.S. GAAP have capital market consequences?", Journal of Accounting and Economics, Vol. 53, pp.249-270, 2012. https://doi.org/10.1016/j.jacceco.2011.05.001
- S. H. Choi, I. S. Kim, K, Choi, "The effect of mandatory K-IFRS adoption: Value relevance and market reaction to K-IFRS reconciliation adjustments", Korean Accounting Review, Vol. 38, No. 4, pp.333-367, 2013.
- V. Capkun, A. C. Jeny, T. Jeanjean, L. A. Weiss, "Earnings management and value relevance during the mandatory transition from Local GAAPs to IFRS in Europe", Working Paper, 2008.
- S. H. Choi, I. S. Kim, K, Choi, "The early adoption of K-IFRS and its effect on the quality of accounting information", Korean Accounting Review, Vol. 36, No. 2, pp.1-30, 2011.
- G. Voulgaris, K. Stathopoulos, M. Walker, "IFRS and the use of accounting-based performance measures in executive pay", Working Paper, 2011.
- K. Ramanna, R. Watts, "Evidence on the use of unverifiable estimates in required goodwill impairment", Review of Accounting Studies, Vol. 17, pp.749-780, 2012. https://doi.org/10.1007/s11142-012-9188-5
- B. Garcia-Osma, P. F. Pope, "Strategic balance sheet adjustments under first-time IFRS adoption and the consequences for earnings quality", Working Paper, 2011.
- A. Christie, L. Zimmerman, "Efficient and opportunistic choices of accounting procedures: Corporate control contests", The Accounting Review, Vol. 69, No. 4, pp.539-566, 1994.
- J. Donovan, R. Frankel, X. Martin, "Accounting conservatism and creditor recovery rate", The Accounting Review, Vol. 90, No. 6, pp.2267-2303, 2015. https://doi.org/10.2308/accr-51045
- J. J. Heckman, "Sample selection bias as a specification error", Econometrica, Vol. 47, pp.153-161, 1979. https://doi.org/10.2307/1912352
- L. F. Lee, "Identification and estimation in binary choice models with limited(censored) dependent variables", Econometrica, Vol. 47, pp.977-996, 1979. https://doi.org/10.2307/1914142