The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting

1.2 SIGNIFICANCE OF THE IFRS TRANSITION

The significance of transition to IFRSs is a function of the type of previous GAAP that an entity adopted before such a move. The impact depends on the degree of prudence of the sets of standards previously used, the differences with IFRSs, and the specific facts and circumstances applicable to each reporting entity. To mention some, the following surveys illustrate the impacts of first-time adoption of IFRSs in certain countries and sectors.

According to a 2007 survey of European publicly listed and unlisted companies, 40% of preparers reported no change in profits, 23% stated that profits slightly increased, and 8% registered a high boost. 16% indicated a slight decrease in profits and 4% a much lower level. The remaining companies did not provide an analytic answer.1

A 2005 survey of 45 IFRS first-time adopters illustrated that on average, profit or loss increased by approximately 43% and equity by 13%. The most significant areas that impacted profit or loss were goodwill for 63% of companies, financial instruments for 35%, employee benefits for 33%, share-based payment for 28%, tax for 26%, and intangible assets for 26%. The most significant areas that impacted equity were employee benefits for approximately 65% of companies, goodwill for 43%, tax for 43%, dividends for 35%, financial instruments for 33%.2

According to another survey concerning 2005 financial statements, approximately 70% of French survey companies improved profit or ...