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Net income comparability between EU-IFRS and US-GAAP before release no. 33-8879 : evidence from fifty US-listed European Union companies

journal contribution
posted on 06.12.2017, 00:00 by C Liu, G O’Farrell, Lee Yao
Since November 15, 2007, US-listed foreign companies that prepare financial statements in accordance with IASB-IFRS (International Financial Reporting Standards as issued by the International Accounting Standards Board) no longer need to reconcile their financial statements to US-GAAP (U.S. generally accepted accounting principles) as per release no. 33-8879. Most companies that used to report with EU-IFRS (European Union members’ implementation of IFRS) claimed compliance with IASB-IFRS immediately. This study explores the comparability between IFRS and US-GAAP reported net income right before release no. 33-8879 took effect. Net income reconciliation from IFRS to US-GAAP by fifty randomly selected US-listed EU companies for financial year 2006 is analyzed. The evidence shows that significant differences still exist between IFRS and US-GAAP in reported net income. Such differences were primarily a result of different accounting treatments of research and development expenditures, pensions, business combinations, and deferred income taxes.

Funding

Category 1 - Australian Competitive Grants (this includes ARC, NHMRC)

History

Volume

4

Issue

1

Start Page

49

End Page

62

Number of Pages

14

eISSN

1936-699X

ISSN

1936-699X

Location

Ruston, LA, USA

Publisher

Academy of Business and Public Administration Disciplines

Language

en-aus

Peer Reviewed

Yes

Open Access

No

External Author Affiliations

Loyola University (New Orleans, La.); University of Winnipeg;

Era Eligible

Yes

Journal

International journal of business, accounting, and finance.

Usage metrics

CQUniversity

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