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IFRS within the European Union: The impact on stakeholders’ understandability of consolidated financial statements
2015 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Purpose: The purpose of this study is to investigate if the consolidated financial state- ments, prepared by publicly traded companies in the European Union, have become more understandable for stakeholders after the mandatory adoption of IFRS. This is done by examining 146 contributions given in the public consultation, conducted by the European Commission in the fall of 2014.

Research design: The study is a quantitative research, using a cross-sectional research design. The data collection originates from the European Commission’s consultation about the impact of the adoption of IFRS within European Union. The data analysis is performed with the use of content analysis, where the authors individually studied the content of the contributions.

Findings: The findings of this study show that the majority of the stakeholders have experienced an increase in the understandability of consolidated financial statements, after the mandatory adoption of IFRS. Some of the reasons for an increased understandability are the usage of IFRS as a single set of accounting standards, and the improvement of comparability and transparency of consolidated financial statements. In contrast, some of the respondents mention that certain aspects of IFRS contributes to a decreased level of understandability. These aspects are that the usage of IFRS; creates information overload or/and disclosure overload, results in greater complexity, and creates difficulties for non-expert users to understand the financial information.

Contribution: After conducting this study, one can conclude that the implementation of IFRS within EU has a positive impact on stakeholders’ understandability of consolidated financial statements. Additionally, that the consolidated financial statements will be less understandable for some stakeholders, after the mandatory adoption.

Value: This study contributes to the limited literature about the adoption of IFRS and the positive impact on stakeholders’ understandability. 

Place, publisher, year, edition, pages
2015. , 44 p.
Keyword [en]
European Union, IFRS, Understandability, Stakeholders, IAS Regulation
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-26733ISRN: JU-IHH-FÖA-2-20150043OAI: oai:DiVA.org:hj-26733DiVA: diva2:813952
Subject / course
IHH, Business Administration
Supervisors
Examiners
Available from: 2015-06-30 Created: 2015-05-25 Last updated: 2015-06-30Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf