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Consequences and determinants of IFRS convergence in India

Tawiah, Vincent and Boolaky, Pran ORCID: 0000-0002-1363-5094 (2020) Consequences and determinants of IFRS convergence in India. International Journal of Accounting and Information Management, 28 (2). ISSN 1834-7649

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Abstract

Purpose The purpose of this paper is to provide evidence of how convergence to International Financial Reporting Standards (IFRS) impacts accounting values and the determinants of variation in equity adjustments among Indian companies. Design/methodology/approach Using a sample of 323 listed companies, the authors empirically test whether there is a significant difference between converged IFRS (Ind.AS) and Indian Generally Accepted Accounting Principles (GAAP) (AS) reported figures and ratios and why companies adjust differently. Findings This paper reveals that fair valuation under Ind.AS causes a significant decrease in goodwill. A substantial decrease in both current and long-term liabilities because of non-recognition of proposed dividend, discounting of long-term provision per Ind.AS was also found. The variations in equity adjustment were significantly influenced by capital structure, level of family control and auditor type. Practical implications This paper provides insights to users who are interested in historical data, that Ind.AS brings significant changes in the accounting values and ratios and the impact differs among companies based on capital structure, ownership and auditor type. Originality/value This paper contributes to the literature of IFRS convergence in India by providing rational analysis of the differences between IFRS, Indian converged GAAP and Indian local GAAP among companies and its impact on accounting values.

Item Type:Article (Published)
Refereed:Yes
Uncontrolled Keywords:Convergence; IFRS; IGAAP; Ind.AS; India
Subjects:Business > Accounting
DCU Faculties and Centres:DCU Faculties and Schools > DCU Business School
Publisher:Emerald
Official URL:https://dx.doi.org/10.1108/IJAIM-06-2019-0062
Copyright Information:© 2020 Emerald
ID Code:25918
Deposited On:28 May 2021 10:52 by Vincent Tawiah . Last Modified 28 May 2021 11:10

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