The Financial Statement Effects of Adopting IFRS by S&P /TSX 60 Canadian Companies

• In Event: Financial Accounting & Reporting and Strategic & Emerging Issues

Abstract

This study examines the adoption of International Financial Reporting Standards (IFRS) by S&P /TSX 60 Canadian companies, largest companies on the Toronto Stock Exchange (TSE). Canadian companies were required to switch from Canadian generally accepted accounting principles (GAAP) to IFRS for annual periods starting on or after January 1, 2011. We examine the financial statement effects of conversion from Canadian GAAP to IFRS. The impact of implementing IFRS on key financial ratios is investigated. Also, selected extracts from profit or loss and statement of financial position are analyzed. Key differences between IFRS and Canadian GAAP, having a major impact on the conversion to IFRS are identified. The study should be important because the SEC is considering IFRS adoption by U.S. publicly traded companies and to all countries worldwide that are in transition to IFRS.

Authors

• Chun-Da Chen, Tennessee State University

• Eva K Jermakowicz, Tennessee State University

• Han Donker, University of Northern British Columbia